European equities rebound after central banks and governments act
The FTSE 100, DAX, CAC 40 and other European indices all climbed higher on Friday, with markets rebounding after central banks and governments provided yet more stimulus to counter the economic impact of Covid-19.
European stocks rebounded on Friday after suffering major losses over the last few weeks, with the stock market responding positively to central banks and governments taking emergency action to limit the economic impact of Covid-19.
The FTSE 100 closed 3% higher on Thursday and continued to rally in early morning trading on Friday, climbing a further 4%.
Meanwhile, Germany’s DAX and France’s CAC 40 also climbed higher with the pair up 6% and 5% respectively.
UK interest rates slashed again to limit economic impact of Covid-19
The Bank of England (BoE) has slashed interest rates again on Thursday in a bid to limit the economic impact of the coronavirus on the UK economy.
The BoE lowered interest rates from 0.25% to 0.1% - its lowest level in the Bank’s 325-year history.
The BoE also said that it will increase its holdings in UK government and corporate bonds by £200 billion as part of emergency measures to lower the cost of borrowing and reduce the economic impact of Covid-19.
The emergency measures by the BoE have been mirrored by other central banks around the world, with the US Federal Reserve also cutting rates to near zero to shore up the US economy against the coronavirus.
US stocks find support
US stocks have also opened higher on Friday morning. The S&P 500, Nasdaq Composite and the Dow Jones all edging higher after the US Senate began debating a $1 trillion-plus stimulus package that could see citizens and small businesses be offered financial support to offset the impact of the coronavirus.
In a note to clients, asset management firm BlackRock said that global financial markets will stabalise so long as three key conditions are met.
‘Markets, in our view, will ultimately settle down if three conditions are met: 1) visibility on the ultimate scale of the coronavirus outbreak and evidence the infection rate as peaked over the long term; 2) deployment of credible and coordinated policy packages; and 3) confidence that financial markets are functioning properly,’ BlackRock said in a note.
You can go long or short various asset classes with IG using derivatives like CFDs.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
React to global volatility
Market volatility continues as coronavirus dominates the global agenda. Trade with us to take advantage of:
- Tight spreads – from just 1 point on major indices, and 2.8 on US crude
- Guaranteed stops – they’re free to use, and you’ll only pay a small fee if they’re triggered
- Round-the-clock assistance – our highly-skilled team are on hand to support you
Live prices on most popular markets