European stock markets nosedive at open
European stock markets slumped further in opening deals on Wednesday, despite countries injecting billions as part of stimulus packages to counteract concerns that the coronavirus pandemic would throw the world into recession.
Frankfurt’s DAX 30 plummeted 4% to 8,580.02 and the Paris CAC 40 dived 3.2% to 3,864.76 points and Milan slipped around 3%. London’s benchmark FTSE 100 index dropped 3.9% to 5,087.15 points just after the open.
Massive European stimulus measures
The market slump showed that the recent series of announcements of stimulus packages from countries worldwide failed to offset coronavirus woes.
“From what we see from the market reaction, massive monetary and fiscal measures deployed are not thought to be enough to prevent economies from plunging into recession,” Swissquote Bank analyst Ipek Ozkardeskaya told French news agency AFP.
Germany had announced €1 billion ($1.1 billion ) in credit for businesses and companies of all sizes through its state-owned kfW business development bank.
The southern state of Bavaria pledged a fund worth up to €10 billion, allowing the local government to buy stakes in faltering companies to prevent insolvencies.
Read more: What are countries doing to minimize economic damage
Markets slump across Asia and the US
Falls in Europe followed losses in Asia where MSCI’s broadest index of Asia-Pacific shares outside Japan fell 3.8% to lows last seen in 2016, led by a 6.4% fall in Australia. Japan’s Nikkei dipped 1.7%. MSCI’s global stocks index dropped 1%.
US stock futures were as much as 4% lower and hitting their daily low limit only a day after the SP 500 jumped 6% and Dow Jones rose 5.2%.
“A rise of 1,000 in Dow is something you see only during a financial crisis. It is not a good sign,” said Nomura Securities fixed income strategist Tomoaki Shishido.
Oil prices fell for a third session with US crude futures plunging to a 17-year low.
The price swings have left market participants reluctant to jump back into the market, reducing trading volume.
mvb/aw (AP, AFP, Reuters)
Article source: https://www.dw.com/en/european-stock-markets-nosedive-at-open/a-52819515?maca=en-rss-en-all-1573-rdf