Dublin's Iseq index and wider European equities markets rose on Tuesday morning as investors took hope from news that China, ground zero of the coronavirus pandemic, had seen a stronger than expected rebound in manufacturing in March.
The Iseq was up 3.5 per cent at 8.35am, while the pan-European Stoxx 600 index edged 0.5 per cent higher, climbing for the fourth time in five sessions amid investor debate over whether there’s ground for a sustained rally given the continued spread of the coronavirus.
The World Health Organization said there are signs of some stabilisation in Europe’s coronavirus outbreak as much of the continent remained in lockdown. Meanwhile in China, the official purchasing managers’ index rose to 52.0 this month. That’s up from a record low of 35.7 in February and above the 50 mark which signals improving conditions.
Still, China’s bureau of statistics cautioned that the single-month data didn’t necessarily mean that economy has returned to normal level amid continuing coronavirus concerns.
Banking stocks were mixed in Dublin in early trading, with AIB up 1.4 per cent and Bank of Ireland off 0.4 per cent. Baked goods maker Aryzta jumped 8.4 per cent while insulation group Kingspan added 3 per cent and gambling giant Flutter soaring 9.6 per cent.
Equities worldwide are on track to round out their worst quarter since 2008 while investors grapple with the economic impact of a pandemic that's still poorly understood. The US is considering a fourth round of stimulus, even while Congress is still arguing over the $2 trillion measure President Donald Trump signed Friday. The euro area will emerge from the crisis with much higher debt levels that risk fragmenting the bloc.
"We just don't know how long the lockdown or stasis of the world economy is going to be," said Toby Lawson, head of global markets at Societe Generale Securities Australia, told Bloomberg TV. "It would be very premature to say that we've seen the bottom." - Additional reporting, Reuters