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European stocks rise on bets ECB will cut rates too

Credit: Reuters Studio
Published on March 4, 2020 - Duration: 01:24s

European stocks rise on bets ECB will cut rates too

Global stock markets initially gave a thumbs down to the U.S. rate cut, but on Wednesday European shares rose on bets the ECB and Bank of England will probably cut rates too.

Julian Satterthwaite reports.

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European stocks rise on bets ECB will cut rates too

What to make of the U.S. rate cut?

Equity traders, at least, don't seem quite sure.

On Tuesday (March 3) Federal Reserve chairman Jerome Powell said the bank would reduce its benchmark rate by half a percentage point: (SOUNDBITE) (English) FEDERAL RESERVE CHAIRMAN JEROME POWELL, SAYING: "We do recognize that a rate cut will not reduce the rate of infection.

It won't fix a broken supply chain.

We get that.

We don't think we have all the answers, but we do believe that our action will provide a meaningful boost to the economy." But U.S. stocks promptly tanked, and on Wednesday (March 4) Asia had a mixed day.

While Shanghai saw gains, Hong Kong's Hang Seng index closed slightly down.

Analysts say some saw the Fed move more as an alarm signal, than a reassurance.

European traders seemed more hopeful though.

Benchmark indexes there were up over 1% by mid morning, with London's FTSE the best performer.

Investors there bet the European Central Bank and Bank of England are now likely to act too.

Economists also expect more stimulus measures by governments around the region.

Chip designer Dialog Semiconductor was among the top gainers, rising as much as 5%.

That after it said the supply chain would return to normal in the second quarter.

On commodity markets, oil was also on the up Wednesday.

Expectations are growing that major producer nations will cut output to boost prices.

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