European stock markets advanced on coronavirus slowdown
The Fed is “closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy,” Powell told US lawmakers.
London’s stock market gained 0.7 per cent, Frankfurt added 1.0 per cent to come within reach of a new record high and Paris was nearly 0.7 per cent higher.
In New York, the Dow Jones index had risen by 0.1 per cent.
You just can’t keep equity markets down these days, said Neil Wilson, chief market analyst at Markets.com.
Major markets struck fresh all-time highs as Jay Powell delivered his testimony to Congress and as fears about the spread of the coronavirus receded in the minds of equity investors, he said.
IG analyst Chris Beauchamp added that European equities have continued the rebound begun yesterday in the US. But … investors have yet to see an end in sight for the crisis in China and with other assets like oil so far refusing to respond in bullish fashion some will worry that equities are beginning to run out of road in the short-term.
China is in focus as workers may return to factories following the coronavirus outbreak which has killed more than 1,000 people and disrupted major global supply chains.
Hong Kong closed up 1.3 per cent, while mainland China’s benchmark Shanghai Composite Index was 0.4 per cent higher. Tokyo was closed for a public holiday.
The freshly-named COVID-19 virus that emerged in central China has spooked equity and oil markets for weeks as it spread to more than two dozen countries.
More than 42,000 infections have been confirmed so far in mainland China and President Xi Jinping has described the situation in Hubei, the outbreak epicentre, as “still very grave”.
Analysts now expect Chinese authorities to unveil policies to ease the economic effect of the virus.
While … uncertainties remain around nCoV, one sure thing you can probably count on is that the mother of all stimulus measures will get laid down by the (Chinese central bank), wrote Stephen Innes, chief market strategist for Asia-Pacific at AxiCorp, using a previous name for the virus.
Chinese tech giant Alibaba, Japanese automaker Nissan and MGM Resorts as well as other companies are expected to announce earnings reports this week.
Fears of a decline in demand from China, and the resulting supply glut, has caused oil prices to tumble in recent weeks as China, the world’s largest importer and consumer of oil, was already battling an economic slowdown when the coronavirus emerged.
But main oil contracts rebounded on Tuesday. Brent Crude was up 1.8 per cent while West Texas Intermediate rose by 1.2 per cent.