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Stocks - Europe Opens Higher as Some Regulators Ban Short-Selling

·2-min read

By Geoffrey Smith -- European stock markets opened with a bounce on Friday after fear of the coronavirus outbreak triggered their worst one-day fall in over 30 years on Thursday.

By 4:10 AM ET (0810 GMT), the benchmark Euro Stoxx 600 was up 8.1 points, or 2.7% at 304.62. However, that's a relatively insignificant move after a drop of over 10% on Thursday that left it down over 17% for the week.

The U.K. FTSE 100 was 6.9% while the German DAX was up 3.8% and the Italian FTSE MIB was up 6.0%.

Some markets were supported by reports of regulators imposing short-selling bans, as well as by the intervention of the Federal Reserve on Thursday, which came after the market close. The Fed had set out plans to inject $1.5 trillion into markets to restore liquidity, while also signaling what analysts dubbed the start of a new wave of quantitative easing.

However, markets are struggling to recover from two badly misjudged interventions from leading policy makers over the last 48 hours. President Donald Trump's failure to address U.S. diagnostic shortcomings, and ECB President Christine Lagarde's insouciant remarks about the rising risk premiums on Italian government bonds, both shook confidence in the ability of economic policy to turn the current situation around.

“The adverse market reaction may not be just a market verdict on the ECB’s package,” said Berenberg’s Schmieding in a note to clients on Thursday. “It may reflect a growing realization that monetary and fiscal policy cannot be the genuine circuit-breakers in a medical emergency.”


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