Markets rise on hopes of stimulus after volatile trading session
Wall Street gains as US Senate set to vote on $2tn package to dull impact of coronavirus
Industrial stocks, led by Boeing, were the biggest boost to the S&P 500, which is still off about $8 trillion in value from its mid-February peak. Photograph: Johannes Eisele/AFP via Getty Images
European stocks ended another tumultuous session higher on Wednesday as investors bet on further stimulus measures to dull the economic impact from the coronavirus outbreak, which showed no signs of slowing.
Wall Street also rose in choppy trading, building on the previous session’s gains, as the US Senate neared a vote to clear a $2 trillion (€1.8 trillion) package to support businesses and households affected by the Covid-19 pandemic.
The Iseq all-share index finished ahead by almost 4 per cent after a whipsaw session.
Hotel group Dalata was among the big gainers, finishing up by 24.5 per cent to close at €2.90. The company said in a trading statement that business in the first three months of the year would be down 16 per cent due to coronavirus. But it said it had €80 million in cash and access to a further €65 million, plus it scrapped its dividend.
The banks also performed well along with their European peers, as investors weighed the potential impact of stimulus. AIB finished ahead by 11.5 per cent to €1.11, while Bank of Ireland was up by 11.1 per cent to €1.96.
Next shares surged 8 per cent as the retailer offered staff a 20 per cent bonus if they volunteered to come to work and pick clothes for online orders.
Housebuilders Persimmon rose 15 per cent, while Bellway dropped 1.5 per cent even as both revealed they were shutting construction sites as demand for new homes plummets.
Rentokil performed poorly, dropping 8 per cent after revealing that coronavirus will have “a much more significant impact on operations” than first thought. It also revealed that it would train 2,500 new disinfectant specialists.
Banking services provider Virgin Money UK topped the STOXX 600, adding about 26 per cent in its second session of recovery after touching a record low earlier in the week.
The pan-European STOXX 600 index closed up 3.1 per cent after earlier trading both in negative territory and as much as almost 5 per cent higher.
The energy and travel and leisure sectors, which have been worst hit by the recent rout, led gains for the day as cheap valuations attracted buyers. However, the euro zone’s volatility indicator also ticked up on the day.
With Covid-19 death tolls in Italy and Spain now the highest in the world, and with several major European economies in lockdown, the situation seemed unlikely to improve any time soon.
German stocks rose about 1.8 per cent, while stocks in Italy, the country worst hit by the virus, rose about 1.7 per cent. German online fashion retailer Zalando closed about 7.5 per cent higher despite warning that shutdowns due to the virus were hurting demand for its products.
German conglomerate Thyssenkrupp had earlier risen 12.6 per cent after saying it would cut 3,000 jobs at its steel unit by 2026, with no forced layoffs until March 2026, as part of a wage deal struck with powerful labour union IG Metall.
Industrial stocks, led by Boeing, were the biggest boost to the S&P 500, which is still off about $8 trillion in value from its mid-February peak.
After seesawing in early trading, the blue-chip index added 5 per cent, boosted by a 30.4 per cent jump in Boeing as sources said the planemaker may restart production of 737 Max jet by May, setting up the stock for its best day since 1981. After losing nearly three-quarters of its value since mid-February, the planemaker, once the symbol of US manufacturing strength, has gained in the last three days as governments mull bailing out the aerospace industry, which is facing near-collapse in demand.
Additional reporting: Reuters/PA