FTSE higher on central bank reassurance
Fiona Cincotta March 2, 2020 10:02 AM
After last week’s brutal stock selloff, the inevitable swing back. Although the coronavirus is still spreading at pace, and the number of cases over the weekend rose by over 5,000, markets are more at ease this morning, having been reassured by several central banks that they would step in to balance out the economic impact of the virus. The Bank of Japan said it was monitoring the situation and was ready to act, as did the Bank of England, while Chinese regulators plan to delay recognizing bad loans from SMEs to help them through the virus-induced shortages of cash.
On the FTSE, investors are balancing out the good news and the bad and are buying into the stocks that were the worst sold off last week including Scottish Mortgage Investment Trust.
Oil majors have bounced back as Brent crude rallied over 3.1% - that is, after last week’s dip below $50. However, airlines remain under pressure as several air carriers cancelled some flights to Italy, and to Georgia following an outbreak there. NMC Health is not trading this morning after the company requested a debt standstill to stabilize its finance. The stock has been clawing its way up since early February and last traded up 6.56% on Friday.
Brent higher ahead of OPEC
Oil investors are hoping that OPEC will decide to extend existing production cuts when it meets this Thursday in Vienna and that it will deepen those cuts by between 600,000 and 1m bpd. Russia remains the joker in the stack of cards, as it has dragged its feet since the beginning of the coronavirus outbreak, despite recommendations from an OPEC technical committee to cut output as early as possible. Brent has rallied above $51 and WTI is close to $46.
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