European Stocks Cling to Gains as Trump Plans Emergency Measures
European Stocks Stage Rebound in Worst Week Since 2008 Crisis
(Bloomberg) --
European equities all but gave up gains on Friday after a report that U.S. President Donald Trump plans to declare a national emergency over the virus outbreak overshadowed optimism on policy responses in Europe.
The Stoxx 600 Index ended the session with up 1.4%, after earlier rallying as much as 8.8% as Germany pledged to spend “billions” to help cushion the blow from the pandemic. Trump plans to declare a national emergency, invoking an act that will open the door to more federal aid for states and municipalities, people familiar with the matter said, before a scheduled news conference at 3 p.m. in Washington.
The Italian FTSE MIB Index was an outperformer, though it more than halved earlier gains. Germany’s DAX Index was up 0.8% after briefly erasing gains that reached 9% at one point. Travel and leisure stocks were the biggest decliners, down 2.4%, on worries over the impact of restrictions on freedom of movement on businesses.
“Until volatility starts coming down, we recommend investors maintain a cautious stance,” Alastair Pinder, a global equity strategist at HSBC Securities, said by phone. “We remain cautious on Europe and despite the sell-off, it’s not the right time to be going into buying European equities.”
European stocks plummeted the most on record on Thursday, after a U.S. travel ban and an underwhelming European Central Bank response did little to calm investors seeking a strong, coordinated effort to deal with the pandemic’s impact on global growth.
Indications from Germany that it will abandon its long-standing balanced-budget policy if necessary appeared to help sentiment earlier today, while a European Union executive said the bloc is ready to trigger a crisis clause allowing fiscal stimulus.
Among notable movers, Roche Holding AG advanced after the Swiss drugmaker won approval from the U.S. government for a highly automated coronavirus test.
READ: Strategist Who Foresaw Market Slump Says Sell-Off Went Too Far
--With assistance from Kit Rees, Michael Msika and Ksenia Galouchko.
To contact the reporters on this story: Namitha Jagadeesh in London at njagadeesh@bloomberg.net;Jan-Patrick Barnert in Frankfurt at jbarnert3@bloomberg.net
To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Jon Menon
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