European Markets Close Lower On Virus Fears

Despite several massive relief packages from global central banks and governments to limit the economic impact of the coronavirus pandemic, stock markets across Europe tumbled on Monday. The mood was quite bearish following the U.S. Congress failing to agree on a massive funding package on Sunday evening. According to reports the Senate is set to vote on the bill later today. The latest reports quote Senate Minority Leader Chuck Schumer as saying, "We're very close to reaching a deal. Very close. And our goal is to reach a deal today," Schumer said. "And we're hopeful, even confident that we will meet that goal." Earlier in the day, Treasury Secretary Steven Mnuchin reportedly said the Congress is "very close" to a stimulus agreement and must get it done "today." Meanwhile, the Federal Reserve has announced extensive new measures to support the economy during the virus pandemic. The Fed said it is committed to using its full range of tools to support households, businesses, and the U.S. economy overall in this challenging time. The measures announced today include an unlimited expansion of the Fed's asset purchases, with the central bank saying it will purchase Treasuries and mortgage-backed securities "in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy." The pan European Stoxx 600 declined 4.35%. The U.K.'s FTSE 100 drifted down 4.34%, Germany's DAX ended down 2.1% and France's CAC 40 lost 3.32%, while Switzerland's SMI tumbled 5.37%. Among other markets in Europe, Austria, Denmark, Finland, Greece, Iceland, Ireland, Italy, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland and Turkey ended with sharp losses. Belgium and Czech Republic settled modestly lower. In France, Safran, Airbus Group and Essilor Luxottica lost 10 to 14%. Dassault Systemes, Accor, BNP Paribas, Veolia Environment, Vinci, Engie, Vivendi, Societe Generale and Renault lost 6 to 8%. Kingfisher soared nearly 14%. Royal Dutch Shell gained 6%. M&G climbed 5.6%, while Whitbread rallied 2.2%. In economic news, UK households' perception about financial well being deteriorated in March to its lowest level since mid-2019, survey results from IHS Markit showed. The household finance index fell sharply to 42.5 in March from 47.6 in February. This was the lowest since May 2019, contrasting with February's survey high. Looking ahead, the survey showed that households expect financial wellbeing to decline over the next 12 months. The German economy is heading into a deep recession due the massive impact of the coronavirus, or covid-19, the Bundesbank said in its monthly report. The domestic economy that underpinned growth amid trade disputes, is now weighed down heavily by the covid-19. However, public finances are well positioned to meet the situation, the central bank said. The ifo institute last week projected the German economy to shrink 1.5% this year. The DIW institute forecast only 0.1% contraction for 2020.

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