Market News & Analysis


Top Story

After the mayhem, brief period of calm

European markets are picking up the pieces after one of the worst trading days in 30 years. The FTSE opened nearly 6% higher but wasn’t able to hold on to this level, slipping back to the 5,400 mark as investors try to assess how much of yesterday’s panic selling was actually called for, and how much was an overreaction.

This morning central banks stepped to the fore to settle the markets and provide a buffer against damage that could be inflicted not so much from the actual coronavirus but the stoppages and cancellations that have now become Europe’s norm. Norway’s Norges Bank cut rates by 50 basis points, Sweden’s central bank will lend 500 billion Swedish crowns to companies in need and although the ECB’s Christine Lagarde offered little by way of reassurance yesterday the ECB’s Chief Economist wrote a blog post leaving the door open for a future rate cut if financial conditions in Europe tighten.   

What might help markets more in the short term is the decision by the London Stock Exchange and the Spanish and Italian bourses to ban short selling of Italian and Spanish stocks for the moment. The spread of the coronavirus in Italy is well reported as the number of cases there hits 15,000, the second highest after China, but the creep higher in the number of cases in Spain has attracted less attention so far.

On the FTSE miners are clocking the highest gains, primarily because news from China is more positive with the number of cases over the last 24 hours increasing by only 21. Supermarkets are also trading higher as investors bet that some of the corona-related panic buying will boost the chains’ quarterly sales.  

From time to time, GAIN Capital Australia Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.

As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.