European markets opened higher Wednesday after Asian shares mostly declined, as governments were ramping up aid for economies reeling from the virus outbreak.
France’s CAC 40 gained 2.5 per cent to 4,750.03, while Germany’s DAX rose 2.3 per cent to 10,712.97. Britain’s FTSE 100 added 1.4 per cent to 6,043.49. U.S. shares were set to open lower with Dow futures down 1.0 and S&P 500 futures 1.1 per cent lower.
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The Bank of England cut its key interest rate by half a percentage point to 0.25 per cent as an emergency measure in response to the outbreak of the COVID-19 virus. The central bank said the move would “help support businesses and consumer confidence at a difficult time.”
Countries are shifting into damage-control as infections spread, prompting sweeping controls on travel, closures of schools and cancellations or postponements of sports events and many other public activities.
Australia’s government announced a $1.6 billion virus-fighting package and reportedly plans an additional $6.5 billion in economic stimulus. Japan and Thailand also have announced fresh help for businesses and workers.
But pessimism prevailed in Asia.
Japan’s benchmark Nikkei 225 lost 2.3 per cent to finish at 19,416.06. Australia’s S&P/ASX 200 plunged 3.6 per cent to 5,725.90. South Korea’s Kospi shed 2.8 per cent to 1,908.27. Hong Kong’s Hang Seng fell 0.6 per cent to 25,231.61, while the Shanghai Composite dipped 0.9 per cent to 2,968.52.
India’s market bucked the trend, with the Sensex picking up 0.9 per cent after reopening following a holiday on Tuesday.
“After the strong rebound yesterday, Asian markets were quite flat this morning. There is consistent fear about the spread of the coronavirus in the U.S. as well as in Europe,” said Louis Wong of Philip Capital Management.
“Investors are still worried that those fiscal stimulus packages may not be able to contain the virus outbreak as well as to mitigate the impact on the economy,” he said.
Worries are growing that a prolonged outbreak may bring on recession.