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Battered: Markets limp to weekend even with ECB billions

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Lull: CNBC’s area on the floor of the New York Stock Exchange lies dormant as shares stabilise

Lull: CNBC’s area on the floor of the New York Stock Exchange lies dormant as shares stabilise

REUTERS

Lull: CNBC’s area on the floor of the New York Stock Exchange lies dormant as shares stabilise

European and US stocks climbed yesterday and borrowing costs of Ireland and other EU member states fell as central banks moved to contain a coronavirus-induced liquidation of swathes of the financial markets.

The yield on Irish 10-year government bonds fell in early trading on Thursday, though gave up some of the better performance as the day went on.

Markets steadied after the European Central Bank overnight announced an additional €750bn support package for markets, but at least some of the bond market recovery ebbed away later in the day.

Investors remain nervous heading into the weekend of more potentially economically damaging measures to contain Covid-19. They are conscious that the supply of new bonds will rise - driving down their value - as governments are forced to dramatically raise debt levels to cope with the shock of the outbreak.

In the UK, the Bank of England cut interest rates again, to just over zero, and announced further bond buying.

The US Federal Reserve also opened the taps for central banks in nine countries to increase the availability of dollars, in the hope of loosening particularly tight bond markets.

The Fed said the swaps, in which the US central bank accepts other currencies as collateral in exchange for dollars, would be in place for at least the next six months.

In Dublin, the overall equities market rose, with big names like Kerry seeing large swings higher, and housebuilders Cairn and Glenveagh and rental giant IRES Reit up. But AIB and Bank of Ireland again saw bruising sell-offs, as their commitments to support customers pushed them to the front of the domestic Covid-19 story.

On Wall Street, the Dow Jones Industrial Average rose 1.93pc, and the MSCI world equity index gained 0.09pc. It was a rare respite after a market meltdown, triggered by worries over the outbreak and the imminent threat of a recession that has wiped almost a third off the value of global shares in weeks.

Irish Independent