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Investing.com – European stock markets climbed strongly Tuesday, helped by further signs central banks will continue to support the global economy in the wake of the damage caused by the coronavirus pandemic.
At 4:30 AM ET (0810 GMT), the DAX in Germany traded 2.1% higher, France’s CAC 40 rose 1.8%, the U.K.’s FTSE index was up 2.3%.
The U.S. Federal Reserve said late Monday it will soon start purchasing individual corporate debt, extending a program that previously had been limited to purchasing bond exchange traded funds.
The Bank of Japan followed earlier Tuesday by extending its corporate lending package to around $1 trillion. The focus will soon turn to Thursday’s monetary policy meeting of the Bank of England, particularly after Tuesday’s unemployment data emphasised the country’s difficult economic circumstances.
Additionally, European Central Bank board member Fabio Panetta urged the European Union to urgently decide on a package of fiscal measures to help the bloc through its pandemic-induced economic crisis.
The EU proposed a 750 billion euro package last month, including 500 billion in grants, but resistance from a handful of fiscally conservative nations has threatened to delay the deal and no agreement in June is now expected.
Global equities had fallen sharply due to worries about the U.S. economy and confirmation of a new coronavirus cluster in China.
However, the Fed’s move and data showing the outbreak in Beijing was being tamed–27 new coronavirus cases reported on Monday, down from 36 new cases the previous day–helped equities head higher.
German consumer price inflation remained in negative territory in May, which will concern the European Central Bank with its inflation-based mandate.
In corporate news, travel stocks including cruise-ship operator Carnival (LON:CCL) and International Consolidated Airlines Group (LON:ICAG) posted strong gains.
One outlier was German online fashion house Zalando, which fell 5.1% after strategic shareholder Kinnevik said it would sell a 4.2% stake through an accelerated bookbuilding process.
Oil prices have edged higher, helped by the renewed enthusiasm in the equity markets, but gains are tentative.
At 4:10 AM ET, U.S. crude futures traded 0.1% higher at $37.14 a barrel. The international benchmark Brent contract rose 0.4% to $39.88.
Elsewhere, gold futures rose 0.4% to $1,735.90/oz, while EUR/USD traded at 1.1325, up 0.1%.
