European markets bounced Tuesday morning after the U.S. Federal Reserve’s announced open-ended asset purchase program on Monday and the number of new coronavirus cases in Italy slowed for a second day.
The pan-European Stoxx 600 jumped 4% in early trade, with basic resources and oil and gas stocks surging 6.9% to lead gains as all sectors and major bourses entered positive territory.
Global stock markets are being boosted by the Fed’s pledge Monday that it will run an open-ended asset purchase program amid the global coronavirus outbreak.
The central bank said the program will run in the “amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy.”
The pledge is a new chapter in the Fed’s “money printing” as it commits to keep expanding its balance sheet as necessary, rather than a commitment to a set amount.
Sentiment may also have been lifted by news that Italy, the European epicenter for the coronavirus pandemic, experienced a smaller daily increase in the number of new confirmed cases for a second consecutive day on Monday.
Meanwhile U.K. Prime Minister Boris Johnson on Monday night announced strict lockdown measures for three weeks in a bid to contain the spread of the virus.
Shares in Asia jumped in Tuesday afternoon trade in reaction to the Fed, with shares in Japan and South Korea leading gains among the region’s major markets.
International focus remains on the spread of the coronavirus pandemic. The World Health Organization warned Monday that the pandemic is picking up pace.
“It took 67 days from the first reported case to reach 100,000 cases, 11 days for second 100,000 cases, and just four days for the third 100,000 cases,” the WHO’s director-general Tedros Adhanom Ghebreyesus said at a press briefing from the organization’s Geneva headquarters.
There are now over 350,000 confirmed cases of the virus globally, and the virus has caused over 15,000 deaths.
In Europe Tuesday, the Eurogroup meeting of euro zone finance ministers will meet via video conference to discuss the region’s response to the coronavirus. The meeting is due at 1830 CET.
On the data front, the euro zone releases flash purchasing manager’s index (PMI) data for services and manufacturing for March.
German remote working software provider Teamviewer jumped 11.8% as countries across Europe urge workers to stay at home, while Subsea 7 shares surged 12.4% to lead the European benchmark in early trading as oil prices were buoyed by the Fed’s latest intervention.
There were no major losses at the start of Tuesday’s session.
– CNBC’s Jeff Cox contributed to this report.