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.

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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.

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