European stocks rally after historic sell-off; Stoxx 600 up 5% 

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European stocks rallied on Friday during a volatile session after their worst sell-off in history, as the rapid spread of the coronavirus pandemic continues to dominate investor sentiment.

The pan-European Stoxx 600 climbed 5%, with basic resource stocks surging 7.6% to lead gains as all sectors except travel and leisure traded firmly in positive territory.

The benchmark had plunged 11% on Thursday to record its biggest one-day loss ever, as markets reacted to U.S. President Donald Trump’s announcement of travel restrictions from the European Schengen area and the European Central Bank’s decision not to cut interest rates.

The coronavirus has now infected more than 128,000 people worldwide, with 4,720 deaths, according to the latest figures from Johns Hopkins University. Italy remains the worst impacted country in Europe and is now facing total shutdown, with cases surpassing 15,000 and 1,016 deaths confirmed as of 6 p.m. on Thursday.

Swiss diagnostics giant Roche announced on Friday that it has received emergency authorization from the U.S. Food and Drug Administration (FDA) for a new coronavirus test.

Stocks in Asia Pacific traded wildly on Friday afternoon, with Australian shares staging a dramatic 4.42% comeback after falling more than 8% at its session lows.

Stateside, Wall Street overnight suffered its worst sell-off since the “Black Monday” crash of 1987, with the Dow plummeting 2,352.6 points or 9.99% and the S&P 500 tumbling 9.5% to join the Dow in a bear market. U.S. futures are pointing to gains of more than 700 points for the Dow at Friday’s open.

Back in Europe, U.K. Prime Minister Boris Johnson said on Thursday that up to 10,000 people in the U.K. may be infected with the virus, while BT confirmed that its CEO Philip Jansen had tested positive for COVID-19.

EU banking regulators have delayed this year’s banking stress test and eased capital rules to encourage lenders not to switch off the faucets to a euro zone economy ailing from the pandemic fallout.

Biggest movers

Italian hearing aid supplier Amplifon jumped 29.5% to the top of the Stoxx 600, while Air France KLM, Poste Italiane and Rubis all added more than 16% amid a broader market resurgence.

Italy’s Leonardo jumped 15.5% after announcing an expected rise in free operating cash flow and investment targets of up to 700 million euros ($782.4 million).

Wirecard shares jumped 11.6% after the German payments company said an independent audit found no manipulation of its financial statements.

Source: CNBC

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