After the mayhem, brief period of calm

European markets are picking up the pieces after one of the worst trading days in 30 years.

Article Default

European markets are picking up the pieces after one of the worst trading days in 30 years. The FTSE opened nearly 6% higher but wasn’t able to hold on to this level, slipping back to the 5,400 mark as investors try to assess how much of yesterday’s panic selling was actually called for, and how much was an overreaction.

This morning central banks stepped to the fore to settle the markets and provide a buffer against damage that could be inflicted not so much from the actual coronavirus but the stoppages and cancellations that have now become Europe’s norm. Norway’s Norges Bank cut rates by 50 basis points, Sweden’s central bank will lend 500 billion Swedish crowns to companies in need and although the ECB’s Christine Lagarde offered little by way of reassurance yesterday the ECB’s Chief Economist wrote a blog post leaving the door open for a future rate cut if financial conditions in Europe tighten.   

What might help markets more in the short term is the decision by the London Stock Exchange and the Spanish and Italian bourses to ban short selling of Italian and Spanish stocks for the moment. The spread of the coronavirus in Italy is well reported as the number of cases there hits 15,000, the second highest after China, but the creep higher in the number of cases in Spain has attracted less attention so far.

On the FTSE miners are clocking the highest gains, primarily because news from China is more positive with the number of cases over the last 24 hours increasing by only 21. Supermarkets are also trading higher as investors bet that some of the corona-related panic buying will boost the chains’ quarterly sales.  

More from Indices


This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit for the complete Risk Disclosure Statement.

Important Notice:

Cryptocurrencies are not legal tender currency and trading of derivatives on Cryptocurrencies are currently not covered under any regulatory regime in Singapore. Consequently, investors should be aware they do not have protection under the Securities and Futures Act (Cap. 289). Please ensure that you are fully aware of the risks.