European Shares Rise After BoE Surprise Rate Cut
European stocks were moving higher on Wednesday after China declared that it has “basically curbed” the spread of the coronavirus disease in Wuhan, the central city at the heart of the global epidemic.
The number of new cases has dramatically fallen in recent weeks but there was a slight uptick in today’s numbers due to the increase in imported cases.
Hopes for stimulus in the face of the epidemic also boosted risk sentiment. The Bank of England today cut interest rates by half a percent to support businesses affected by the economic uncertainty amid the coronavirus outbreak.
The central bank also introduced a new scheme to ensure companies can easily and cheaply access credit.
The U.K. Chancellor of the Exchequer will present his Budget to Parliament later day. Chancellor Rishi Sunak is likely to provide additional funds to the NHS and households amidst the spread of coronavirus.
The pan-European Stoxx Europe 600 index was up 1.45 percent at 340.47 after declining 1.1 percent to the lowest level since January 2019 on Tuesday.
The German DAX and France’s CAC 40 index jumped around 1.8 percent, while the U.K.’s FTSE 100 was up 0.4 percent.
Dignity shares plunged as much as 20 percent. The provider of funeral related services warned that a regulatory investigation could “materially” impact both its industry and the company itself.
Wealth management firm Quilter jumped 5.4 percent after its full-year underlying profit performance came ahead of market expectations.
Balfour Beatty jumped 10 percent. The construction group reported an 8 percent increase in annual operating profit.
FirstGroup, a provider of transport services in the U.K. and North America, advanced 1.6 percent after providing an update on its portfolio rationalization strategy and on trading since the end of September 2019.
Puma SE shares tumbled 3.3 percent. The sportswear maker said that COVID-19 outbreak has negatively impacted its business since the beginning of February both in terms of sales and sourcing.
Sporting goods manufacturer Adidas plunged 4 percent. The company expects first-quarter sales to drop by up to 1 billion euros ($1.14 billion) in greater China due to the coronavirus.
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