Virus fears weigh on European stock markets - Pakistan Today

Virus fears weigh on European stock markets

PARIS: Coronavirus fears weighed on European stock markets Thursday despite China reporting a big drop in new cases and easing borrowing costs to cushion the epidemic’s economic impact.

Traders have been betting on central banks, particularly China’s, doing what it takes to keep their economies chugging along as the new coronavirus hits corporate earnings and economic growth.

In a widely anticipated move, the People’s Bank of China (PBoC) lowered its one-year and five-year loan prime rates as policymakers seek to reduce the impact of the virus-fuelled slowdown on companies and households.

But the moves were “not nearly enough”, said Stephen Innes of AxiCorp.

“The PBoC needs to exceed the market expectations, not hit them in this environment,” he said.

“If the PBoC made a bigger splash, the market would have reacted more favourably” than the 1.8-percent gain Thursday for Shanghai’s main stocks index.

Sentiment had improved in recent days amid growing hopes that the impact of the virus — which has killed more than 2,100 people and infected over 74,000, mostly in China — will be short-lived.

China reported a big drop in new cases on Thursday, fuelling hopes the epidemic is nearing its peak.

In the best-case scenario, the economic hit from the epidemic in China will be short-lived, but it comes as the global economy remains fragile, IMF chief Kristalina Georgieva said Wednesday.

Overnight gains on Wall Street boosted Asian equities at the start of trading before gains evaporated.

European stock markets were slightly lower approaching the half-way mark, with a rebound for British retail sales failing to ignite the pound and London’s benchmark FTSE 100 stocks index.

Elsewhere Thursday, oil prices were mixed as traders assess the virus’ impact on demand for crude in China, the world’s biggest importer and consumer of the commodity.

Oil traders were tracking also unrest in crude-producing nation Libya.

The country’s unity government has announced it is halting its participation in UN talks aimed at brokering a lasting ceasefire in the war-torn country where a fragile truce has been repeatedly violated.

– Key figures around 1100 GMT –

London – FTSE 100: DOWN 0.1 percent at 7,450.39 points

Frankfurt – DAX 30: DOWN 0.1 percent at 13,774.98

Paris – CAC 40: DOWN 0.2 percent at 6,098.18

EURO STOXX 50: DOWN 0.4 percent at 3,851.42

Tokyo – Nikkei 225: UP 0.3 percent at 23,479.15 (close)

Shanghai – Composite: UP 1.8 percent at 3,030.15 (close)

Hong Kong – Hang Seng: DOWN 0.2 percent at 27,609.16 (close)

New York – Dow: UP 0.4 percent to 29,348.03 (close)

Euro/dollar: DOWN at $1.0792 from $1.0805 at 2200 GMT

Pound/dollar: DOWN at $1.2879 from $1.2920

Euro/pound: UP at 83.79 pence from 83.63 pence

Dollar/yen: UP at 112.10 from 111.37

Brent Crude: DOWN 0.1 percent at $59.04 per barrel

West Texas Intermediate: UP 0.3 percent at $53.47 per barrel