DAX Rebounds As ECB Unveils Huge Bond Program

German stocks rebounded on Thursday after the European Central Bank announced a new EUR 750 billion Pandemic Emergency Purchase Program to combat the risks posed by the outbreak and escalating diffusion of the coronavirus.

At an unscheduled meeting on Wednesday, the governing council decided to launch a new temporary asset purchase program that covers both public and private securities to counter the serious risks to the monetary policy transmission.

The bank expanded the eligible securities for purchases to non-financial commercial papers and eased the collateral standards which would help banks to get more funds. Greek government bonds are also included in the program.

"Extraordinary times require extraordinary action," ECB President Christine Lagarde said. However, the central bank said the net asset purchases will be terminated once it judges that the covid-19 crisis phase is over, but in any case, not before the end of the year.

The benchmark DAX was up 116 points, or 1.38 percent, at 8,572 after plunging 5.6 percent in the previous session.

Banks Commerzbank and Deutsche Bank climbed 4-5 percent.

Osram Licht slumped 11 percent. The lighting manufacturer said it does not expect to achieve its corporate targets for the current 2020 financial year, due to the COVID-19 pandemic.

Lufthansa soared 5 percent. The airline said, for fiscal 2020, the magnitude of the expected decline in adjusted EBIT is currently not predictable.

MorphoSys rallied 3.5 percent despite widening its FY19 loss.

Hugo Boss gave up 6.3 percent. The luxury fashion house announced that it has temporarily closed a large number of retail stores as well as many points-of-sale at important partners in Europe and North America, as a result of global spread of COVID-19.

HeidelbergCement was moving lower. The company said, due to the fast spread of the coronavirus, a valid outlook on the 2020 business year is currently not possible.



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