logo
Plus   Neg
Share
Email

European Shares Seen Opening On Steady Note

stockmarkets aug20 24mar20 lt

European stocks may open higher on Tuesday as traders bet that global central banks will unveil more easing measures to shield the world economy from a looming recession caused by the coronavirus.

The U.S. dollar sank as the Fed's unlimited quantitative easing and aggressive asset-buying from the Bank of Japan prompted traders to return to risk assets.

Banks borrowed a total of $89.3 billion (76.69 billion pounds) from the central bank's one-week dollar funding operation amid virus-led disruptions, the Bank of Japan said.

The borrowing was well beyond its previous record of $50.2 billion, hit during the 2008 global financial crisis.

South Korea doubled a planned economic rescue package to 100 trillion won ($80 billion).

New Zealand is set to provide a major financial support package for home owners and businesses that are badly hit by covid-19.

The Philippine central bank approved the purchase of PHP 300 billion government securities to provide extra lifeline to the national government.

Asian markets rallied as the Fed's unprecedented measures helped ease painful strains in financial markets.

Both Morgan Stanley and Goldman Sachs Group Inc. economists said the coronavirus will inflict greater economic pain than they previously thought.

The coronavirus pandemic will cause a global recession in 2020 that could be worse than the one triggered by the global financial crisis of 2008-2009, but world economic output should recover in 2021, the International Monetary Fund said.

With 379,080 confirmed cases and 16,524 deaths, the virus has now reached more than 170 countries.

Italy recorded a smaller day-to-day increase in new coronavirus cases for the second straight day, but officials cautioned it was too soon to know if the country is at the beginning of a positive trend.

In the U.S, there are reports of hospitals running low on masks, gloves and other critical gear. President Trump told reporters he believes the American economy could be reopened in weeks, not months.

British Prime Minister Boris Johnson called the virus the "biggest threat this country has faced for decades" as the country goes into effective lockdown to deal with the threat of the pandemic.

Gold rose more than 1 percent as the dollar snapped a ten-day rally. Oil extended overnight gains after the Fed promised aggressive asset purchases to support markets.

Flash Purchasing Managers' survey results from euro area and the U.K. are due later in the session, headlining a light day for the European economic news.

U.S. stocks ended sharply lower overnight as confirmed coronavirus cases in the U.S. jumped above 40,000 and a massive fiscal stimulus bill failed to clear a procedural hurdle in the Senate for the second straight day.

President Donald Trump praised Fed Chair Jerome Powell after the central bank said it would purchase an unlimited number of Treasury bonds and mortgage-backed securities to support smooth market functioning.

The Dow Jones Industrial Average tumbled 3 percent and the S&P 500 plunged 2.9 percent to hit fresh three-year closing lows, while the tech-heavy Nasdaq Composite eased 0.3 percent to end at its lowest level in over a year.

European markets fell on Monday as countries around the world continued to wage battle to contain the spread of COVID-19. The pan European Stoxx 600 gave up 4.3 percent. The German DAX lost 2.1 percent, France's CAC 40 index declined 3.3 percent and the U.K.'s FTSE 100 shed 3.8 percent.

For comments and feedback contact: editorial@rttnews.com

Business News

Follow RTT