European shares bounce on Fed's stimulus plan

Irish market moves higher in morning trade

Photograph: iStock

Photograph: iStock

 

European shares jumped on Tuesday as sentiment was lifted by the launch of the US Federal Reserve’s corporate bond buying programme and concerns about a second wave of global coronavirus infections eased.

The Fed is set to start purchasing corporate bonds on Tuesday through the secondary market corporate credit facility (SMCCF), one of several emergency facilities recently launched by the US central bank to shore up liquidity.

The Irish index of shares rose 3.7 per cent to 6,129.48 on Tuesday morning, led by gains in Bank of Ireland and AIB, which jumped 10.5 per cent and 9.6 per cent respectively compared to Monday’s close. The pan-European Stoxx 600 index rose 2 per cent, recovering from a slump in the past few sessions that was fuelled by grim forecasts of an economic rebound due to the Covid-19 pandemic and a resurgence in infections in the United States and Beijing.

But soothing some fears, health officials said there were 27 new coronavirus cases in Beijing, down from 36 new cases the previous day.

Battered travel and leisure stocks surged 3.9 per cent, led by a 6.6 per cent jump in Cineworld after the British cinema operator said it expected all of its theatres to reopen by July. In Dublin, Ryanair shares rose almost 5 per cent over yesterday’s closing price to reach €11.35 , while hotel group Dalata saw its shares increase more than 4 per cent to €3.34.

The German Dax index added 2.4 per cent, while Italian and British bourses rose 2 per cent and 2.5 per cent, respectively.

Germany’s Zalando fell 5.1 per cent following a stake sale by Swedish investment firm Kinnevik AB in the online fashion retailer. – Reuters