Bank of England boosts European shares; recession fear remains

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Bank of England boosts European shares; recession fear remains

On Thursday, the 19th of March 2020, a slew of European shares had bounced back from a seven-year low following reveal of another round of fiscal stimulus from the BoE (Bank of England), while a weaker pound sterling alongside a multi-year low euro had also contributed to the gains, nonetheless, questions were raised on whether the measures would be able to counter the financial shocks the coronavirus pandemic would likely to bring in over the coming days.

In point of fact, the complexion of Thursday’s (March 19th) European market was almost entirely galvanized by the BoE decision to slash interest by 0.1 per cent alongside an emergency measure to ramp up bond-buying, while an ECB measure to provide zero-interest loan to a number of battered small- and medium-scale businesses in the bloc had ballooned the investors’ optimism further.

Besides, despite a global-scale recession risk dangling fire over the bloc’s economy amid a fast-spreading coronavirus pandemic, the regional pan-European STOXX 600 index, which shed more than a third of its value since a record closing high reached last month, had wrapped up the day 2.9 per cent higher.

Meanwhile, downplaying impacts of Thursday’s (March 19th) gain, a developed markets economist at ING, James Smith, alongside EMEA FX chief at ING, Petra Krpata, wrote in a client note, “Ultimately none of this will, unfortunately, stop a UK recession, which like most of the developed world, now looks inevitable.

But the hope is that many of these measures can help limit the increase in unemployment, and foster a swifter and smoother recovery when the virus-shutdowns have passed. ” Citing statistics, on Thursday’s (Market 19th) market wrap-up, London’s FTSE 100 gained 1.40 per cent to 5,151.61, Frankfurt’s DAX rose by 2.00 per cent to 8,610.43, while French CAC 40 had wrapped up Thursday’s (Market 19th) market 2.68 per cent higher to 3,855.50.

Elsewhere in the Europe, Madrid’s IBEX 35 added 1.93 per cent to 6,395.80, while Italy’s benchmark FTSE MIB surged 2.29 per cent to curtain off the day at 15.466.97.