European Shares Seeking Rebound
European stocks are likely to open higher on Monday after entering deeper into correction territory last week on coronavirus-related concerns.
According to the National Health Commission, the death toll from the novel coronavirus outbreak in China rose to 2,914, bringing the total number of confirmed cases close to 80,000.
The World Health Organization has raised the global alert level from high to “very high,” noting that the virus appears to particularly hit those over the age of 60 and people already weakened by other illness.
The UN health agency stressed that “oxygen therapy is a major treatment intervention for patients with severe COVID-19.”
Asian markets reversed early losses to edge higher as investors priced in policy responses from the U.S Federal Reserve to the Bank of Japan and the Reserve Bank of Australia to weather the damaging economic impact of the coronavirus epidemic.
The U.S. Federal Reserve is expected to cut interest rates at its next meeting on March 18.
U.S. President Donald Trump said it was “about time” the Federal Reserve acted like a “leader” and lowered interest rates.
The Reserve Bank of Australia holds its second meeting of the year on Tuesday and the central bank is all-but certain to cut interest rates. Economists expect
New Zealand’s Reserve Bank to follow suit at its next meeting later this month.
In a rare emergency statement, Bank of Japan Governor Haruhiko Kuroda said the central bank would take necessary steps to help protect markets the impact of the coronavirus.
Investors are also counting on Beijing to loosen the purse strings after both official and private surveys showed China’s factory activity collapsing to its worst levels on record.
The Caixin/Markit Manufacturing Purchasing Managers’ Index showed China’s factory activity contracted in February, with a record low score of 40.3. The official manufacturing PMI came in at 35.7 — shrinking at the fastest pace on record.
The yen and the euro rose against the dollar in Asian trading, while gold prices rose by more than 1 percent on safe-haven demand. Oil pared losses after hitting multi-year lows earlier in the session.
Final Purchasing Managers’ survey results from the euro area and the U.K. are due later in the session, headlining a busy day for the European economic news.
U.S. stocks ended mostly lower on Friday to log their worst weekly performance since the 2008 financial crisis as investors fretted about the spreading coronavirus and its impact on corporate earnings.
Markets, however, ended off their day’s lows, after Federal Reserve Chairman Jerome Powell said the central bank will “act as appropriate to support the economy” amid evolving risks to economic activity.
The Dow Jones Industrial Average lost 1.4 percent to end at a nearly nine-month low and the S&P 500 gave up 0.8 percent to close at a four-month low, while the tech-heavy Nasdaq Composite index inched up marginally.
European markets tumbled deep into correction territory on Friday amid concerns the coronavirus outbreak could trigger some sort of a global recession.
The pan European Stoxx 600 lost 3.5 percent. The German DAX plummeted as much as 3.9 percent, France’s CAC 40 index plunged 3.4 percent and the U.K.’s FTSE 100 tumbled 3.2 percent.
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