US STOCKS rebounded on Tuesday following Wall Street’s sharpest daily drop in more than three decades, while equities elsewhere wobbled as Governments and Central Banks scramble to try and calm the coronavirus panic. Meanwhile oil prices drifted below USD 30 per barrel, and the dollar bounced back from heavy losses against the euro on Monday.
Wall Street stock indices pushed higher at the opening bell, with the Dow adding 1.7 per cent, after having collapsed on Monday in their worst day since 1987. The S&P 500 and Nasdaq dropped about 12 per cent and the Dow nearly 13 per cent, as measures taken by Central Banks and Governments to contain the outbreak of the coronavirus were taken to highlight the depth of the crisis. Sentiment was helped on Tuesday by reports that US President Donald Trump will ask Congress to approve a massive USD 850 billion emergency spending package to contain the growing economic damage from the coronavirus pandemic that will include a payroll tax cut and a bailout for airlines.
European stock markets surged around five per cent in early deals on Tuesday before erasing their gains. “As has been the case every time the European markets have tried to rebound, it is not going to be smooth sailing,” noted Connor Campbell, analyst at Spreadex trading group. In a move meant to help tame the massive volatility in the markets caused by the coronavirus outbreak, the French bourse regulator on Tuesday banned short-selling in 92 top stocks for the day.
“Taking into account the significant losses in recent days on the financial markets, the Financial Markets Authority (AMF) has decided to take an urgent step,” it said in a statement. Investors use short-selling to bet the market will fall, putting tremendous downward pressure on prices at a time when buying interest is virtually non-existent.