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Europe: Stocks rebound at open

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European stock markets rallied by more than two per cent in opening deals on Tuesday, as global investor sentiment was boosted by US Federal Reserve stimulus news.

[LONDON] European stock markets rallied by more than two per cent in opening deals on Tuesday, as global investor sentiment was boosted by US Federal Reserve stimulus news.

In initial trade, London's benchmark FTSE 100 index of blue-chip firms advanced 2.5 per cent to 6,214.39 points, Frankfurt's DAX 30 index rose 2.4 per cent to 12,199.97 and the Paris CAC 40 gained 2.3 per cent to 4,925.07.

Asian equities jumped as growing fears about a possible second wave of infections were eclipsed by the Fed's launch of a massive programme to support Main Street businesses hit by the virus lockdown.

The main driver of the gains was the Fed's Main Street Lending Program and an emergency lifeline under which the Fed will buy up to US$750 billion in corporate bonds.

"The formal start of the Fed's corporate bond buying programme boosted global sentiment," said City Index analyst Fiona Cincotta.

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"Adding to the seemingly addictive stimulus high, the Trump administration is weighing up a US$1 trillion infrastructure spend to spur on the economy in the wake of the coronavirus crisis."

AFP

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