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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 |
Another central bank has eased monetary policy - and this time it’s China. | |
The People’s Bank of China is allowing Chinese banks to hold less capital in reserve, freeing up more funds to support their customers. | |
This cut in China’s reserve requirement ratio will free up 550 billion yuan (£60bn) into the economy, PBoC says. | |
The Spanish stock market authorities have also banned the short-selling of some stocks, which has pushed the IBEX index up 5% this morning. | |
But curbing speculation won’t fix the looming economic crisis, as Pierre Veyret of ActivTrades writes: | |
The Bank of Japan’s pledge to keep the markets flush with liquidity is helping markets recover, reckons IG’s Sara Walker. | |
Gracious, it’s choppy in the City today. | |
The FTSE 100 is clambering higher, up 210 points or 4% to 5452 after two hours of trading. | |
And a clear picture is emerging -- major international companies are rising today, with oil giant Royal Dutch Shell 8%, and miners such as BHP and Anglo American up around 10%. | |
But companies reliant on discretionary spending are falling again. Obviously that includes the holiday operators. Retailers, such as JD Sports (-2.5%) and housebuilders such as Barratt (-2%), are out of favour too, as traders anticipate the impact of a recession and isolation measures. Whitbread, which runs the Premier Inn chain of hotels, are down 1.7% too. | |
A reminder of Australia’s wild trading session overnight: | A reminder of Australia’s wild trading session overnight: |
There’s always a danger that stock market rebounds are merely ‘dead cat bounces’ -- a swift, but short recovery before another tumble. | There’s always a danger that stock market rebounds are merely ‘dead cat bounces’ -- a swift, but short recovery before another tumble. |
Fiona Cincotta of City Index has sent this chart over, showing how recent rises (white blocks) have been followed by sharper falls (the black blocks). | Fiona Cincotta of City Index has sent this chart over, showing how recent rises (white blocks) have been followed by sharper falls (the black blocks). |
She explains: | She explains: |
Italy’s stock market is having a better day, with the FTSE MIB index up almost 5% this morning. | Italy’s stock market is having a better day, with the FTSE MIB index up almost 5% this morning. |
The overnight ban on short-selling may be helping, as it prevents speculators driving a firm’s share price down. | The overnight ban on short-selling may be helping, as it prevents speculators driving a firm’s share price down. |
But it’s only a small relief, as the FTSE MIB slumped by almost 17% yesterday alone. | But it’s only a small relief, as the FTSE MIB slumped by almost 17% yesterday alone. |
France’s finance minister, Bruno Le Maire, is trying to calm the markets too. | 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: | 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.” | 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”: | 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. | 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. | 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%). | 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%). | 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: | 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. | 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. | 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: | Reuters has the details: |