LONDON: European stock markets inched higher to post a third straight day of gains on Wednesday, tracking a rally on Wall Street, but sentiment remained fragile with all eyes on whether eurozone finance ministers will agree an economic rescue package.
The pan-European STOXX 600 index ended up 0.02 per cent, reversing earlier losses of as much as 1.5pc. Equities posted a strong start to the week on hopes that the rate of coronavirus infections was plateauing in western Europe and the United States.
London shares closed down 0.5pc, paring earlier losses of up to 2pc, while the main index in Paris finished 0.1pc higher.
Euro zone finance ministers have struggled to agree a coordinated economic support package despite several calls for common debt issuance to back businesses impacted by the outbreak.
“The impression it gives the world is that Europe is disjointed, and that will reinforce the view that the overall response will be slower and less impressive than elsewhere,” said Kit Juckes, a macro strategist at Societe Generale in London.
Energy, mining, insurers and bank stocks were among the biggest decliners. Defensive real estate stocks gained 1.4pc, while travel and leisure led with a 3.3pc rise.
UK insurers, including Direct Line and Aviva PLC , were among the biggest decliners on the STOXX 600 after they cancelled more than 1 billion pounds ($1.2 billion) of dividends on Wednesday to conserve funds to tackle the fallout from the pandemic.
Sources said carmaker Renault’s board might also consider suspending its dividend while miner Rio Tinto said it would press ahead with its own payout.
The pan-region benchmark index has gained about 20pc since hitting an eight-year low on March 16, boosted by aggressive global stimulus measures, but remains 25pc below its all-time high.
The chairman of the euro zone finance ministers, Mario Centeno, suspended talks on a half a trillion euro package until Thursday, sending the 10-year Italian bond yield to its highest since March 19.
Published in Dawn, April 9th, 2020