Yahoo Finance European stocks climb as Germany plots path out of lockdown
European stock markets opened higher on Thursday 16 April, as investors were buoyed by news of Germany’s plans to relax COVID-19 restrictions on daily life.
Germany’s DAX (^GDAXI) and the CAC 40 (^FCHI) in France were both 1.3% higher after just over an hour and a half of trading. The FTSE 100 (^FTSE) lagged behind, trading up just 0.1% at the same time.
Analysts said European markets were buoyed by signs that lockdowns across part of the continent would begin to be eased in the coming weeks. Germany announced it is extending its lockdown to 3 May but said some parts of the country could gradually begin to open up again after that date.
The announcement boosted financials and car makers. Deutsche Bank (DBK.DE) stock rose 3.6% in Frankfurt, while stock exchange operator Deutsche Borse (DB1.DE) gained 3.1%. Mercedes Benz owner Daimler (DAI.DE) rose 2.5%, Volkswagen (VOW3.DE) climbed 1.5%, and BMW (BMW.DE) rose 2%.
“Germany has drawn a plan to ease off the lockdown restrictions and traders are optimistic about this development,” said Naeem Aslam, chief market analyst at Avatrade.
“Having said this, European markets aren’t trading higher with bigger margins, we are only seeing some small gains, and it is likely that as the trading resumes, these small gains may disappear because of the selling pressure on the energy sector.”
The modestly higher open follows a sharp sell-off on Wednesday, driven by fears that the coronavirus pandemic could cause a deep global recession.
“Global equities sold off as data releases for March along with company earnings showed that we are now going to enter the peak of the bad data/earnings news even if we may be past the peak of the epidemic for now,” Deutsche Bank strategist Jim Reid wrote in a morning note to clients.
Investor attention will today be focused on the latest US jobless numbers, due at 12.30pm UK time. Economists are expecting another 5.5 million jobless claims, on top of the 16.8 million of people who have already filed claims over the last three weeks. Deutsche Bank expects US unemployment to rise to 17% in April, which would be a new post-World War Two high.
Despite pessimistic expectations, US futures were pointing to a higher open for stock markets later today. S&P 500 futures (ES=F) and Dow Jones futures (YM=F) were 0.7% higher, while Nasdaq futures (NQ=F) were up 1%.
In the UK, the government is later today expected to announce a three week extension to the coronavirus lockdown.
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