By Geoffrey Smith
Investing.com -- Europe’s stock markets opened higher on Wednesday, after the Bank of England announced an emergency half-point interest rate cut and other measures, strengthening hopes of a coordinated policy response to tackle the economic impact of the coronavirus outbreak.
The Bank of England’s measures turned markets round, reversing premarket losses as Europe prepared to follow the after-hours move in U.S. stocks.
U.S. indices had reversed after President Donald Trump failed to show up to a scheduled press conference where he was expected to unveil a raft of supportive fiscal policy measures.
By 3:10 AM ET, (0810 GMT), the benchmark Stoxx 600 was up 1.1% to 340.78. The U.K. FTSE 100 was up 1.7% and the German DAX was up 1.4%.
The BoE had also announced a new lending scheme targeted at helping small and medium-sized enterprises and waived its 1% countercyclical capital buffer, a move that will allow banks to run temporarily with lower levels of capital and reduce the need for them to restrict lending to the real economy.
Royal Bank of Scotland (LON:RBS) was the biggest gainer from the measures, rising 2.2%. HSBC shares 1.8% while Barclays (LON:BARC) shares rose 1.0%.
Elsewhere, Adidas (DE:ADSGN) stock opened down 6.0% after the sportswear maker said it expects a 1 billion-euro hit to revenue in the first quarter due to the coronavirus. It said Chinese sales were down by over 80% in the first two months of the year and CEO Kaper Rorsted told Bloomberg TV that he expects the recovery to take some time, as sports gear is unlikely to be top of consumers’ list of priorities as they emerge from quarantine.
In other markets, crude oil edged lower after Saudi Aramco (SE:2222) said it had been instructed by the government to raise its output capacity to 13 million barrels a day. The company had said on Tuesday that it expects to pump more than 12 million b/d from April, up over 2 million b/d from previous output levels. Brent crude futures were down 0.4% at $37.08 a barrel.