Feb 20, 2020: Coronavirus fears weighed on European stock markets Thursday despite China reporting a big drop in new cases and easing borrowing costs to cushion the epidemic's economic impact.
Traders have been betting on central banks, particularly China's, doing what it takes to keep their economies chugging along as the new coronavirus hits corporate earnings and economic growth.
In a widely anticipated move, the People's Bank of China (PBoC) lowered its one-year and five-year loan prime rates as policymakers seek to reduce the impact of the virus-fuelled slowdown on companies and households.
But the moves were “not nearly enough”, said Stephen Innes of AxiCorp.
“The PBoC needs to exceed the market expectations, not hit them in this environment,” he said.
“If the PBoC made a bigger splash, the market would have reacted more favourably” than the 1.8-percent gain Thursday for Shanghai's main stocks index.
Sentiment had improved in recent days amid growing hopes that the impact of the virus — which has killed more than 2,100 people and infected over 74,000, mostly in China — will be short-lived.
China reported a big drop in new cases on Thursday, fuelling hopes the epidemic is nearing its peak.
In the best-case scenario, the economic hit from the epidemic in China will be short-lived, but it comes as the global economy remains fragile, IMF chief Kristalina Georgieva said Wednesday.
Overnight gains on Wall Street boosted Asian equities at the start of trading before gains evaporated.
European stock markets were slightly lower approaching the half-way mark, with a rebound for British retail sales failing to ignite the pound and London's benchmark FTSE 100 stocks index.
Elsewhere Thursday, oil prices were mixed as traders assess the virus' impact on demand for crude in China, the world's biggest importer and consumer of the commodity.
Oil traders were tracking also unrest in crude-producing nation Libya.
The country's unity government has announced it is halting its participation in UN talks aimed at brokering a lasting ceasefire in the war-torn country where a fragile truce has been repeatedly violated.