European shares jumped for a second straight session on Friday, as a wave of fiscal and monetary stimulus tempted investors back into equity markets after days of selling on signs the world was headed into a deep, coronavirus-driven recession.
The European Commission said that it was looking at loosening debt rules for member states and issuing common eurozone bonds in an attempt to shore up businesses and households crushed by the meltdown in economic activity.
The pan-European STOXX 600 rose 1.8 percent on Friday, but was down 2 percent for the week and still looking at its worst month in three decades as the deepening spread of COVID-19 in Europe forces countries to shut down.
Financials on Friday rose 3.9 percent from a near 30-year low, with Allianz SE, Prudential PLC, ING Groep and Zurich Insurance Group surging 8.5 percent to 12 percent.
Even travel and leisure stocks attempted a rebound in what has been their worst month so far since October 1987, as the promise of more stimulus raised hopes of a smoother recovery from the health crisis.
The optimism was reflected across global equity markets, as the US Senate debated a US$1 trillion-plus package that would include direct financial help for Americans.
Meanwhile, sources told reporters that China was set to unleash trillions of yuan of fiscal stimulus.
“It’s seemingly having a positive effect given the market needed a trillion-dollar worth of help this week to just make it to the weekend,” AxiCorp Financial Services Pty Ltd markets strategist Stephen Innes said.
“[But it is] the calm before the storm, I’m afraid, as the nasty impact on corporate solvency will become more evident in the weeks ahead, when the demand shock filters through to the real economy,” Innes said.
Several blue-chip European firms have flagged a severe hit to business as the pandemic empties hotels and crushes consumer spending, with the airline industry facing a complete collapse in the face of halt in global travel.
British retailer Marks & Spencer Group PLC was the latest to warn about an impact in its clothing, homewares and international businesses, sending its shares down 5.2 percent.
Holiday Inn owner InterContinental Hotels Group PLC said demand for hotels was at the lowest levels it had ever seen and announced a series of measures to cut costs.
NOT ALL GOOD: Analysts warned that other data for last month might be less rosy due to the virus and analysts expect the PMI to contract again next month Chinese factory activity saw surprise growth last month as businesses went back to work following a lengthy shutdown, but analysts said that the economy faces a challenging recovery as external demand has been devastated by the COVID-19 pandemic, while the World Bank said that growth could screech to a halt. China is slowly returning to life after months of tough restrictions aimed at containing the virus, which put millions of people into virtual house arrest and brought economic activity to a near standstill. The strict measures saw a closely watched gauge of manufacturing plunge to its lowest level on record in February,
The output of the global smartphone industry this year is to contract by 7.8 percent on an annual basis as the COVID-19 pandemic ushers in a global recession, Taipei-based market researcher TrendForce Corp (集邦科技) said in a report on Monday. The global production of smartphones is expected to fall to 1.29 billion units, as the pandemic dampens demand for consumer electronics, leading to a decline in shipments across Europe and North America, TrendForce said. With consumers delaying smartphone purchases and thereby lengthening the device replacement cycle, overall prices would suffer a setback that is expected to negatively affect the profitability of smartphone
ELECTRONICS Lite-On delays sale of unit Lite-On Technology Corp (光寶科技) yesterday said it would postpone the sale of its solid-state drives (SSD) business to Kioxia Holdings Corp, formerly known as Toshiba Memory Holdings Corp, due to disruptions amid the COVID-19 pandemic. Last year, the Taiwan-based electronics components supplier struck the deal with the Japanese firm, agreeing to sell the unit for US$165 million. Citing unfinished integration work due to the pandemic, Lite-On has deferred today’s closing date until further notice, adding that the delay would not have a negative effect on the unit’s operations. AUTO PARTS Hiroca approves dividend Automotive interior parts supplier Hiroca
DEVELOPING TALENT: The electronics contractor is looking to recruit people to work in core tech fields and emerging industries like electric cars and robotics Hon Hai Precision Industry Co (鴻海精密), the world’s largest contract electronics maker, has launched a recruitment drive, offering a monthly salary of no less than NT$45,000 (US$1,485) to university graduates. For those with a master’s degree, the starting pay would be NT$52,000 per month at the minimum, while doctorate degree holders would receive at least NT$60,000 a month, Hon Hai said a statement issued early this week. The latest recruitment drive is aimed at attracting talent in core technology fields — artificial intelligence, semiconductors and next-generation mobile communications — and emerging industries — electric vehicles, digital healthcare and robotics, the