European stocks mostly down despite promise of huge stimulus by central bank

Markets in Europe opened higher on Thursday, but have since retreated. This is despite the €750 billion ($821 billion) bond-buying program by the European Central Bank to help the region’s economy through the Covid-19 crisis.

Stock markets in London and Frankfurt opened over one percent higher, before retreating into negative territory. French stocks were up over three percent in early trade, before giving up most of the gains.

On Wednesday, the regulator announced the new ‘Pandemic Emergency Purchase Program’ which will use the funds to purchase securities in order to help support the European economy.

“The ECB will ensure that all sectors of the economy can benefit from supportive financing conditions that enable them to absorb this shock,” the central bank said. “This applies equally to families, firms, banks and governments. The Governing Council will do everything necessary within its mandate.” The ECB has detailed that the asset-purchase program will last at least through 2020.

Markets in Asia Pacific lost their earlier upward momentum in Thursday trade as fears over the economic impact of the coronavirus outbreak continued to weigh on investor sentiment. Hong Kong’s Hang Seng index closed down almost three percent while China’s Shanghai Composite lost 1.2 percent. Japan’s Nikkei was also down more than one percent.

The market jitters followed yet another volatile day on Wall Street on Wednesday, and the news that the New York Stock Exchange (NYSE) will shut down its trading floor and temporarily switch to electronic transactions after several traders were confirmed to carry the coronavirus.

So far, markets have not been impressed with government promises to fight the coronavirus. Global stocks have been continuing their freefall despite Western governments pledging billions of dollars to help businesses and citizens get through the pandemic.

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