NEW YORK: Oil and global equity markets recovered on Tuesday after the prior day’s shellacking as the world’s biggest economies moved to cushion the impact of the coronavirus, but stock gains in Europe failed to hold as investors remained skittish.

The price of Brent crude roared back as much as 10pc on hopes a supply cut deal could be rescued while most benchmark government bond yields rose from record lows as measures took shape to confront the epidemic’s economic and human toll.

Benchmark Brent crude futures bounced by $2.83 to $37.19 a barrel, roughly half the level it started the year.

US President Donald Trump said he would ask Congress for a payroll tax cut and other “very major” stimulus moves to ease the economic pain, but details were unclear.

Japan unveiled a second package of measures worth about $4 billion in spending, focusing on support to small and mid-sized firms.

Wall Street jumped more than 3pc at the open but pared gains to about 1pc in choppy trade. Investors hoped the sell-off on Monday marked the low of a downturn that has pushed the major US indexes close to bear market territory, a decline of 20pc from recent peaks.

“Investors are trying put a bottom in here,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.

“It seems like that yesterday was such a collection of so much bad news, it shocked the market down. Today with fresh eyes people are picking out the names they think have dropped the most,” he said.

MSCI’s gauge of stocks across the globe gained 0.80pc but the pan-European STOXX 600 index lost 1.14pc, solidly in bear territory.

Major European bourses declined after initial gains and remained in bear territory.

The FTSE 100 in London almost eked out a gain but closed down 0.1pc as oil companies rebounded following a crash in oil prices as Saudi Arabia and Russia engaged in a price war.

Oil heavyweights BP Plc and Royal Dutch Shell Plc gained 3.4pc and 3.7pc, respectively, after closing Monday with their worst session on record.

“Traders are a bit nervy, the only positive news we’ve been getting out is probably rate cuts or tax cuts,” Michael Baker, an analyst at ETX Capital in London.

Yields on benchmark US 10-year Treasury debt more than doubled to 0.70pc and those on German bonds jumped around 20 basis points at one point as investors pared some safe-haven holdings, though they were beginning to ease again.

Stocks in Asia rebounded, with Japan’s Nikkei closing up 0.85pc after earlier touching its lowest level since April 2017.

China’s benchmark Shanghai Composite Index traded 2.1pc higher as new domestic coronavirus

Gold prices fell 1pc, retreating from the last session’s jump above the key $1,700 level, as safe-haven demand waned a little amid speculation about global stimulus measures.

Published in Dawn, March 11th, 2020