European stocks rise on hopes massive US cash injection will lift global economy
Markets in Europe continued gaining on Wednesday as the US government agrees to unlock $2 trillion worth of funds to cushion the blow to the economy from the coronavirus pandemic.
Britain’s FTSE 100 index surged almost two percent at the start of trading in London. Germany’s DAX is up almost three percent, while France’s CAC is gaining almost five percent.
This follows huge gains by European stocks on Tuesday with the British stock market gaining over nine percent, German stocks surging almost 11 percent, and French stocks closing almost five percent higher.
Positive investor sentiment in Europe comes on hopes that the US economy will finally receive a $2 trillion boost to mitigate the impact of the coronavirus pandemic.
Markets rallied after Republicans and Democrats reached an agreement on a massive package amounting to $2 trillion to rescue the US economy amid the Covid-19 outbreak. The bill is set to give hundreds of billions to businesses that were forced to shut down and lay off workers due to prevention measures, and stipulates one-time payments to Americans among other measures.
The news sent Asian markets higher with Japan’s benchmark Nikkei gaining over eight percent, while stocks in Hong Kong and mainland China added between two and three percent. Other markets in Asia-Pacific were also up on Wednesday, with both Australia’s All Ordinaries and India’s key Mumbai Sensex jumping more than five percent.
European leaders are also looking for ways to shield the economy from disruptions caused by the coronavirus. On Tuesday, G7 finance ministers and central bank governors vowed to “do whatever is necessary” to restore economic growth and to protect jobs and European businesses.
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