European stocks are likely to open higher on Wednesday after the U.S. Senate passed a nearly $2tn stimulus package to help rescue the American economy ravaged by the coronavirus pandemic. The bill now goes to the House, where Democrats have introduced their own proposal.
The upside, however, may remain limited against the backdrop of continued coronavirus spread.
The highly contagious respiratory virus has infected more than 400,000 people worldwide and over 18,900 have died, according to Johns Hopkins University.
India, with 1.3 billion people, or one-sixth of the Earth’s population, ordered the biggest lockdown in the world.
The Tokyo Olympics have been postponed to next year as coronavirus deaths and infections surged in Europe and the U.S.
As cases in the America surpassed 53,000 with more than 600 deaths, World Health Organization officials cautioned the U.S. may soon overtake Italy as the world’s coronavirus epicenter.
New York’s virus case count is doubling every three days. Italy reported an increase in new virus cases and deaths. Spain had so many corpses it commandeered an ice rink to store them.
Eurozone finance ministers broadly supported the use of bailout fund, or the European Stability Mechanism, to help those member countries struggling hardly with the coronavirus outbreak.
Asian markets climbed, with Chinese shares hitting a one-week high as mainland China reported a drop in new imported coronavirus cases and no locally transmitted infections were reported.
A survey showed that more than one fifth of American companies in China are back to normal operations after widespread disruptions to business operations, supply chains and economic activity.
The dollar fell for a second day and gold traded little changed, while oil extended gains after the American Petroleum Institute (API) reported a drop in the U.S. crude oil supply.
Reports on consumer and producer prices from the U.K. are due later in the session, headlining a light day for the European economic news.
Across the Atlantic, a report on durable goods orders in February is scheduled to be released later today.
Overnight, U.S. stocks soared amid signs that Democrats and Republicans are closing in on an agreement on a massive fiscal stimulus bill. Traders also reacted positively to President Trump’s push to shorten coronavirus shutdown and get the economy back up and running.
The Dow Jones Industrial Average skyrocketed 11.4 percent to post its biggest percentage gain since 1933, while the tech-heavy Nasdaq Composite rallied 8.1 percent and the S&P 500 climbed 9.4 percent.
European markets posted their biggest one-day gain since late 2008, with the Fed’s unprecedented stimulus and a slowdown in virus infections in Italy boosting sentiment.
The pan European Stoxx 600 gained 8.4 percent. The German DAX jumped 11 percent, France’s CAC 40 index spiked 8.4 percent and the U.K.’s FTSE 100 advanced 9.1 percent.
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