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Markets stabilise after worst day since 1987 amid coronavirus panic – business live | Markets stabilise after worst day since 1987 amid coronavirus panic – business live |
(32 minutes later) | |
Rolling coverage of the latest economic and financial news | Rolling coverage of the latest economic and financial news |
France’s finance minister, Bruno Le Maire, is trying to calm the markets too. | |
He told the BFM TV channel that Paris will support companies in which the government holds shares, pledging: | |
Le Maire didn’t give more details. But he did suggest that the overall cost of helping French businesses and workers would run into “dozens of billions of euros.” | |
He also described Donald Trump’s EU travel ban as an “aberration”: | |
An hour into the trading session, the FTSE 100 is 2% higher at 5347. | |
That’s 109 points higher than last night’s close (when the Footsie slumped 10% to its lowest point since 2012), but down on the 8am bounce. | |
Mining companies are leading the 78 risers, along with supermarket chains Morrisons (+5%) and Tesco (+4%). | |
But there are now over 20 fallers, led by cruise firm Carnival (-11%),holiday firm TUI (-7%) and budget airline easyJet (-4%). | |
Investors worldwide are extremely jittery, as Russ Mould of stockbrokers AJ Bell reports: | |
Japan’s central bank has announced it will take steps to boost the amount of liquidity in the markets. | |
This will include the use of ‘repo’ operations -- where a central bank provides cash in exchange for collateral such as government bonds. This would prevent a bank running out of liquidity, if other banks were too nervous to lend to it. | |
Reuters has the details: | |
Norway’s central bank has slashed interest rates this morning, in an unexpected move to protect its economy from Covid-19. | Norway’s central bank has slashed interest rates this morning, in an unexpected move to protect its economy from Covid-19. |
The emergency move cut Norwegian interest rates from 1.5% to 1%, and follows unscheduled rate cuts in the UK, US and Canada in recent days. | The emergency move cut Norwegian interest rates from 1.5% to 1%, and follows unscheduled rate cuts in the UK, US and Canada in recent days. |
The Norges Bank warned: | The Norges Bank warned: |
It added that its rate-setting committee is “monitoring developments closely and is prepared to make further rate cuts.” | It added that its rate-setting committee is “monitoring developments closely and is prepared to make further rate cuts.” |
ING economist David Smith says the move was forced by the sharp fall in oil prices, and also in global interest rate expectations: | ING economist David Smith says the move was forced by the sharp fall in oil prices, and also in global interest rate expectations: |
Hmmm... this morning’s rally is losing more momentum - with the FTSE 100 now up around one hundred points still (nearly 2%). | Hmmm... this morning’s rally is losing more momentum - with the FTSE 100 now up around one hundred points still (nearly 2%). |
As Connor Campbell of SpreadEx puts it: | As Connor Campbell of SpreadEx puts it: |
Savers and pension holders will welcome any rally today. | Savers and pension holders will welcome any rally today. |
But today’s rebound looks rather unimpressive, in the context of the last few days: | But today’s rebound looks rather unimpressive, in the context of the last few days: |
After that early surge, the UK and other European markets have stabilised up around 3% to 4%. | After that early surge, the UK and other European markets have stabilised up around 3% to 4%. |
Correction: Australia’s market finished UP 4%, not down as I mistyped earlier. Even better! | Correction: Australia’s market finished UP 4%, not down as I mistyped earlier. Even better! |
Britain’s FTSE 250 index of medium-sized firms is also rallying, but with less oomph than its big sibling. | Britain’s FTSE 250 index of medium-sized firms is also rallying, but with less oomph than its big sibling. |
The FTSE 250 has gained almost 2% in early trading. But Cineworld (which might breach its banking covenants if forced to close cinemas) are down 13%, and Restaurant Group (Frankie & Bennies, Wagamama) are down another 5%. | The FTSE 250 has gained almost 2% in early trading. But Cineworld (which might breach its banking covenants if forced to close cinemas) are down 13%, and Restaurant Group (Frankie & Bennies, Wagamama) are down another 5%. |
The threat of mass sporting cancellations is hitting gambling firms, with William Hill down 6%. | The threat of mass sporting cancellations is hitting gambling firms, with William Hill down 6%. |
European stock markets are also recovering, after a historic 10% plunge on Thursday. | European stock markets are also recovering, after a historic 10% plunge on Thursday. |
Germany’s DAX has risen by 3.5% at the open, with financial stocks such as Deutsche Bank (+7%) and Commerzbank (+11%) among the risers. | Germany’s DAX has risen by 3.5% at the open, with financial stocks such as Deutsche Bank (+7%) and Commerzbank (+11%) among the risers. |
Shares are surging back in London, as the stock market reopens after Thursday’s rout. | Shares are surging back in London, as the stock market reopens after Thursday’s rout. |
A massive early burst of buying has lifting the market back up from last night’s seven-year lows. | A massive early burst of buying has lifting the market back up from last night’s seven-year lows. |
The FTSE 100 has leapt by over 6%, or 332 points, back to 5565 points. | The FTSE 100 has leapt by over 6%, or 332 points, back to 5565 points. |
Almost every share is rising sharply. Mining giants BHP Billiton and Rio Tinto are leaving the rally, up over 13% each. Insurance firm L&G has gained 10%, as some calm returns to the City. | Almost every share is rising sharply. Mining giants BHP Billiton and Rio Tinto are leaving the rally, up over 13% each. Insurance firm L&G has gained 10%, as some calm returns to the City. |
It’s still early days, but this might calm some nerves. | It’s still early days, but this might calm some nerves. |
One company is still tumbling, though -- cruise operator Carnival is down another 7%. | One company is still tumbling, though -- cruise operator Carnival is down another 7%. |
Covid-19 has reached Britain’s business leaders. | Covid-19 has reached Britain’s business leaders. |
Telecoms firm BT’s CEO, Philip Jansen, has tested positive for the virus -- making him (we think) the first publicly confirmed case among FTSE 100 bosses. He’s now self-isolating, and keeping working. | Telecoms firm BT’s CEO, Philip Jansen, has tested positive for the virus -- making him (we think) the first publicly confirmed case among FTSE 100 bosses. He’s now self-isolating, and keeping working. |
Jansen said in a statement: | Jansen said in a statement: |
More here: | More here: |
Stock market regulators are taking steps to shore up the markets. | Stock market regulators are taking steps to shore up the markets. |
Overnight, Italy’s watchdog announced a temporary short-selling ban on some stocks - to prevent speculators from selling shares they don’t own (and buying them back cheaper). Britain’s FCA says the move will also affect Italian banks traded in the City. | Overnight, Italy’s watchdog announced a temporary short-selling ban on some stocks - to prevent speculators from selling shares they don’t own (and buying them back cheaper). Britain’s FCA says the move will also affect Italian banks traded in the City. |
South Korea has announced a similar move too: | South Korea has announced a similar move too: |
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
World markets are in panic mode, after the worst day since 1987 on both sides of the Atlantic yesterday. | World markets are in panic mode, after the worst day since 1987 on both sides of the Atlantic yesterday. |
Investors are grappling with three questions; how bad the coronavirus pandemic will become, how serious an economic downturn it will cause, and whether policymaker will intervene decisively and effectively. | Investors are grappling with three questions; how bad the coronavirus pandemic will become, how serious an economic downturn it will cause, and whether policymaker will intervene decisively and effectively. |
(Many will also be pondering why they didn’t sell three weeks ago, but this is no time for introspection). | (Many will also be pondering why they didn’t sell three weeks ago, but this is no time for introspection). |
It’s already been a wild Friday in Asia-Pacific. Japan’s Nikkei index plunged by 10% at one stage, matching the horror scenes on the London and New York stock exchange on Thursday. Australia’s market saw blistering selling too, sending the S&P/ASX200 down 8% at one stage. | It’s already been a wild Friday in Asia-Pacific. Japan’s Nikkei index plunged by 10% at one stage, matching the horror scenes on the London and New York stock exchange on Thursday. Australia’s market saw blistering selling too, sending the S&P/ASX200 down 8% at one stage. |
But.... there was a late mini-recovery, meaning Tokyo *only* finished 6% lower, with Sydney UP 4.4%. And that means European markets MIGHT have a better morning. | But.... there was a late mini-recovery, meaning Tokyo *only* finished 6% lower, with Sydney UP 4.4%. And that means European markets MIGHT have a better morning. |
That late comeback in Asia may show hopes of a co-ordinated fiscal and monetary response to the crisis over the weekend, or may suggest that some investors think the sell-off has gone far enough. | That late comeback in Asia may show hopes of a co-ordinated fiscal and monetary response to the crisis over the weekend, or may suggest that some investors think the sell-off has gone far enough. |
Last night, the US Federal Reserve delved into its arsenal -- pledging to inject at least $1.5tn into the markets, and to restart its bond-buying programme. That, though, didn’t prevent fresh losses on Wall Street. | Last night, the US Federal Reserve delved into its arsenal -- pledging to inject at least $1.5tn into the markets, and to restart its bond-buying programme. That, though, didn’t prevent fresh losses on Wall Street. |
So what for Europe and the US today? | So what for Europe and the US today? |
Frankly, who knows how the next few hours will play out. But it’s not going to be a gentle ride. | Frankly, who knows how the next few hours will play out. But it’s not going to be a gentle ride. |
As things stand, the FTSE 100 is expected to rebound by at least 3% - bringing some relief to the City. Wall Street is also being called higher -- with Dow futures up over 800 points. | As things stand, the FTSE 100 is expected to rebound by at least 3% - bringing some relief to the City. Wall Street is also being called higher -- with Dow futures up over 800 points. |
That wouldn’t even recover Thursday’s rout, though, let alone the losses of the last three weeks. But traders may be grateful for what they can get. | That wouldn’t even recover Thursday’s rout, though, let alone the losses of the last three weeks. But traders may be grateful for what they can get. |
Ipek Ozkardeskaya, analyst at Swissquote, warns it could be a volatile day: | Ipek Ozkardeskaya, analyst at Swissquote, warns it could be a volatile day: |
We’ll be tracking all the action through the day. Hold tight. | We’ll be tracking all the action through the day. Hold tight. |
The agenda: | The agenda: |
3pm GMT: University of Michigan survey of US consumer confidence | 3pm GMT: University of Michigan survey of US consumer confidence |