European markets have risen slightly this morning (March 19) after the European Central Bank launched an emergency lifeline worth €750bn (£700bn).
The ECB announced yesterday (March 18) a ‘Pandemic Emergency Purchase Programme’ which is set to see the central bank buy government and company debt across the eurozone.
It said the purchases would be conducted until the end of 2020 and would include the debts of embattled Italy and Greece.
Christine Lagarde, the ECB boss, said: “Extraordinary times require extraordinary action. There are no limits to our commitment to the euro.
“We are determined to use the full potential of our tools, within our mandate.”
The announcement comes as a number of governments and central banks across the globe have revealed fiscal and monetary stimulus plans to help fight the coronavirus pandemic.
On Wednesday (March 17), UK chancellor Rishi Sunak announced a £350bn war chest of government backed loans for businesses and protections for households to battle the economic impact of the coronavirus crisis.
The Bank of England had previously cut UK interest rates to 0.25 per cent — the joint lowest the bank’s base rate has ever been.
Markets have crept upwards on the news, with the Euro Stoxx 50 up 2.6 per cent since opening this morning. The FTSE 100 peaked at 1.3 per cent shortly after opening but is now up 0.5 per cent on yesterday’s close.
The Dax — the German blue chip stock market index — is up nearly 2 per cent.
The spreading coronavirus crisis has also caused global markets to tumble as governments across the world shut borders, locked down domestic travel and closed sports and leisure facilities.
Since February 24 the FTSE 100 has fallen by 26 per cent while the S&P 500 has dropped by 21 per cent over the same period. The Euro Stoxx 50 is down 30 per cent.
Volatile market conditions have seen indices suffer their biggest daily dives in more than 30 years this month.
imogen.tew@ft.com
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