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European shares stabilise after worst week since 2008

European shares steadied in opening trade this morning after their worst weekly showing since the 2008 financial crisis.

Shares were higher on rising hopes that major central banks will step in to counter the impact of the coronavirus epidemic on global growth. 

The pan-European STOXX 600 index rose 1.8% after a 12% slump last week, with miners and oil and gas companies leading the gains. 

Shares in London had soared 2.5% in opening trade, while the Paris and Frankfurt stock markets were both up 1.4%.

The Dublin market also opened with gains this morning, adding 1.6% in early trade.

Sentiment firmed as bleak factory activity data out of China fuelled hopes of more stimulus, even as new infections in the country declined. 

However, the virus continues to spread elsewhere. The US reported its second death, while the UK reported a total of 36 cases as of Sunday. 

Italy, the worst-hit in Europe, saw death toll rise to 34, five more than a day earlier.

Investors are betting that the US Federal Reserve will cut interest rates by 50 basis points as early as March, while the European Central Bank is expected to cut rates by a 10 basis point (bps) at the April meeting.

Most Asian and European markets rose in earlier trade today Monday as bargain-buyers moved in after last week’s global rout and central banks including the Federal Reserve flagged support measures such as interest rate cuts.

Markets in Japan closed 0.9% higher, while Hong Kong markets were up 0.6%.

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