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Financial markets rebound after panic sell-off as global central banks pledge to pump in more cash

Financial markets rebound after panic sell-off as global central banks pledge to pump in more cash
Stock markets in Europe and Asia rose on Monday amid growing hopes that stimulus measures will help financial markets to stabilize after last week’s massive losses.

China’s benchmark Shanghai Composite gained 3.15 percent to close at 2,970.93 points, while key indices of the Shenzhen Stock Exchange, the Shenzhen Component and the Shenzhen Composite, jumped 3.65 percent and 3.15 percent respectively. Hong Kong’s Hang Seng index ended the first trading day of the week more than 0.6 percent higher.

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Mainland Chinese stocks rallied, despite disappointing manufacturing data published over the weekend. The report showed that manufacturing activity dropped in February as a result of the fast-spreading coronavirus that has kept most plants in China closed for weeks.

Other indices in Asia also rebounded, with Japan's Nikkei 225 jumping nearly one percent and South Korea's Kospi gaining nearly 0.8 percent. The rally comes as the Bank of Japan pledged to closely monitor the situation during the epidemic and “provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases.”

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European markets opened higher on Monday, with the pan-European Stoxx 600 surging around 1.8 percent. The UK's FTSE 100 was up 2.53 percent, while Germany’s DAX added 1.45 percent. Stocks in Russia jumped around 2.3 percent after Friday’s steep fall.

Monday’s gains come amid expectations that the world’s major central banks may step up efforts to stabilize the economy after coronavirus panic resulted in the worst day for the markets since the global financial crisis of 2008. On Friday, the US Federal Reserve vowed to “use our tools and act as appropriate to support the economy,” calling the coronavirus a risk for economic activity.

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