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Share markets rise as global sell-off eases | |
(about 3 hours later) | |
US and European markets have recovered some ground amid signs authorities are implementing measures aimed at easing the economic pain caused by the coronavirus outbreak. | |
The main US indexes gained more than 3% in early trade, while London's FTSE 100 and other exchanges made similar moves. | |
The rally comes a day after Wall Street suffered its biggest losses since 1987. | |
Investors fear economies could slide into recession as a result of the pandemic and steps to tackle it. | |
In many countries business has been disrupted, events cancelled and schools closed in an effort to contain the spread of the virus. | |
On Friday, the European Union said it will put in place a package of measures, including a €37bn euro (£33bn) investment initiative. | |
And German finance minister Olaf Scholz said his country could part nationalise firms to tackle the crisis. | |
In the US, Congress is expected to vote later today on a bill that will provide sick pay and short-term loans for those affected by the outbreak, among other measures. | |
US Secretary Steven Mnuchin pledged the US would use "whatever tools we need". | |
In an interview with US broadcaster CNBC, he said he believed the coronavirus slowdown would be short-term and said the situation in 1987, when markets dropped some 20%, was a "much scarier time". | |
"This is nothing compared to that," he said. | |
Stock markets have been in turmoil in recent weeks with investors deeply concerned about the economic effects of coronavirus. | |
On Thursday, benchmark indexes on Wall Street and in the City of London saw their steepest daily falls since so-called Black Monday in 1987. In France and Germany, indexes lost more than 12%. | |
Those declines came despite actions by the Federal Reserve and European Central Bank to support the market. | |
On Friday, Japan's Nikkei 225 index was down by more than 10% in early trading before regaining some ground to end about 6% lower. | |
Australia's benchmark ASX 200 saw its biggest trading swing on record as it reversed a loss of 8.1% to end the day 4.4% higher. | Australia's benchmark ASX 200 saw its biggest trading swing on record as it reversed a loss of 8.1% to end the day 4.4% higher. |
Trading in India's Nifty 50 stock index was halted for 45 minutes on Friday morning after it fell 10% and hit a "circuit-breaker" and bounced back into positive territory once trading resumed. | Trading in India's Nifty 50 stock index was halted for 45 minutes on Friday morning after it fell 10% and hit a "circuit-breaker" and bounced back into positive territory once trading resumed. |
The Hang Seng in Hong Kong closed down more than 1%, and China's Shanghai Composite was 1.2% lower, both off their session lows. | The Hang Seng in Hong Kong closed down more than 1%, and China's Shanghai Composite was 1.2% lower, both off their session lows. |
"There is a sense of fear and panic," said James Tao, an analyst at stockbroker Commsec in Sydney."It's one of those situations where there is so much uncertainty that no-one quite knows how to respond... if it's fight or flight, many people are choosing flight at the moment," he added. | "There is a sense of fear and panic," said James Tao, an analyst at stockbroker Commsec in Sydney."It's one of those situations where there is so much uncertainty that no-one quite knows how to respond... if it's fight or flight, many people are choosing flight at the moment," he added. |
On Friday, the UK's Financial Conduct Authority (FCA) prohibited short selling of a raft of shares in Italian and Spanish firms, after a request from authorities in those countries for the action, which is designed to protect that list of companies. | |
The prohibition on short selling came after major falls in Italian and Spanish indexes on Thursday. | |
Short selling is speculation that the price of a stock will go down, and if there are more short sellers than buyers, the price will be pushed down. | |
Firms including football clubs Lazio and Juventus were on the list, as well as luxury car manufacturer Ferrari. | |
Pound v dollar | Pound v dollar |
Why should I care if stock markets fall? | Why should I care if stock markets fall? |
Many people's initial reaction to "the markets" is that they are not directly affected, because they do not invest money. | Many people's initial reaction to "the markets" is that they are not directly affected, because they do not invest money. |
Yet there are millions of people with a pension - either private or through work - who will see their savings (in what is known as a defined contribution pension) invested by pension schemes. The value of their savings pot is influenced by the performance of these investments. | Yet there are millions of people with a pension - either private or through work - who will see their savings (in what is known as a defined contribution pension) invested by pension schemes. The value of their savings pot is influenced by the performance of these investments. |
So big rises or falls can affect your pension, but the advice is to remember that pension savings, like any investments, are usually a long-term bet. | So big rises or falls can affect your pension, but the advice is to remember that pension savings, like any investments, are usually a long-term bet. |
Read more here. | Read more here. |
What are your experiences relating to the coronavirus outbreak? Share your experiences by emailing haveyoursay@bbc.co.uk. | What are your experiences relating to the coronavirus outbreak? Share your experiences by emailing haveyoursay@bbc.co.uk. |
Please include a contact number if you are willing to speak to a BBC journalist. You can also contact us in the following ways: | Please include a contact number if you are willing to speak to a BBC journalist. You can also contact us in the following ways: |
Or use the form below | Or use the form below |