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Share gains fade as stocks markets stay on edge over virus | |
(32 minutes later) | |
Sharp rises on US and European stock markets on Friday have begun to fade despite fresh attempts by authorities to ease the economic pain caused by the coronavirus outbreak. | |
Wall Street's Dow Jones opened 5% up, while markets in London, Paris, and Frankfurt had traded 7% higher. | |
But the main US indexes drifted lower to about 1% up, while the FTSE 100 made similar moves. | |
It 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. | 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. | 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. | 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. | And German finance minister Olaf Scholz said his country could part nationalise firms to tackle the crisis. |
'Whatever we need' | |
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. | 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". | 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". | 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. | "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. | 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%. | 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. | Those declines came despite actions by the Federal Reserve and European Central Bank to support the market. |
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. | 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. | 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. | 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. | 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 |