Markets rebound on US stimulus hopes
Iseq closes almost 7% higher with AIB and CRH among gainers
Boeing helped the Dow surge 1,400 points on signs that its grounded jet could fly by the middle of the year. Photograph: Johannes Eisele/AFP
Financial markets rebounded sharply on Tuesday, with global equities headed for their biggest bounce since the coronavirus crisis erupted a month ago.
Ireland’s Iseq stocks index closed 6.94 per cent higher on Tuesday, but remained more than 33 per cent lower since the start of the year.
Banking stocks were a particular bright spot in Irish trading, with AIB rallying 24.6 per cent. Bank of Ireland ended the day 6.91 per cent higher.
Forecourt retailer Applegreen, which initially opened higher, was more than 11 per cent down after it warned that it expected a “material reduction” in profits this year.
Baked goods group Aryzta also fell into the red despite opening higher with investors concerned over its move to cut costs as it too noted that the spread of Covid-19 will have a “material impact” on its full-year results. The company’s shares were down 7.27 per cent.
Other gainers on the day was building materials giant CRH and Dalata Hotel Group, which rose 12 per cent and 22.6 per cent respectively.
The blue-chip FTSE 100 index closed 9.05 higher on Tuesday, a rebound from its weakest close since October 2011 on Monday.
Among individual movers, British travel and leisure stocks Cineworld and Carnival bounced back from severe drops in valuation.
The commodity-heavy index was boosted by a jump in oil and metal prices. Oil majors BP and Royal Dutch Shell rallied more than 20 per cent, while the wider mining index rose 15 per cent, led by BHP Group, Rio Tinto and Anglo American.
Britain’s biggest sportswear retailer JD Sports rose 19 per cent as it delayed the publication of financial results to May, but said it had enough cash to ride out the coronavirus crisis.
The pan-European Stoxx 600 index jumped 8.4 per cent in its strongest session since late 2008. The index was still roughly 30 per cent down from a record peak hit in February.
The European basic resources and oil and gas subsectors were the best performers for the day, adding more than 15 per cent each. Both sectors recovered from multi-year lows.
Italian stocks surged nearly 9 per cent, marking their best day in nearly a decade as latest numbers showing a slowdown in new cases of Covid-19 raised hopes that the most aggressive phase of the outbreak may be passing.
German stocks jumped nearly 11 per cent in its best session since 2008.
Takeaway. com, Europe’s largest online food ordering service, closed 9.3 per cent higher after it said late on Monday that it would grant a delay in payments for Dutch restaurants on its platform that have been hit by the coronavirus.
Wall Street bounced from three-year lows on Tuesday on hopes of a major fiscal stimulus to blunt the economic damage from the coronavirus, while Boeing helped the Dow surge 1,400 points on signs that its grounded jet could fly by the middle of the year.
All three main US stock indices jumped, recovering from a brutal sell-off in the previous session as the virus outbreak forced entire nations to shut down.
Boeing, once a symbol of US manufacturing strength, jumped 17 per cent after chief executive Dave Calhoun said the aircraft manufacturer expected the 737 Max jet to return to service by mid-year. It has lost nearly two-thirds of its value so far this year.
Data on Monday showed US business activity hit a record low in March, bolstering views that the economy was already in what Longbow Asset Management’s Dollarhide called “a government-mandated recession”. Still, there were broad gains on Wall Street as the S&P energy index rose nearly 10 per cent, the most among the 11 major sectors, tracking a surge in oil prices. – Additional reporting: Reuters