Europe stocks bounce after worst rout since ‘08 on stimulus bets

Bloomberg

European stocks rebounded on Tuesday from their biggest selloff since 2008 on optimism about stimulus measures to counter the impact of the coronavirus.
The Stoxx Europe 600 Index rose as much as 3.5%, tracking gains in US futures, after President Donald Trump said he will seek a payroll tax cut and “very substantial relief” for industries hit by the virus. The intraday gain was the biggest in almost four years.
All 19 Stoxx 600 industry groups climbed, led by cyclical shares such as miners, banks and carmakers. Energy shares gained 6% after March 09’s record plunge.
The virus outbreak beyond China spurred a meltdown in risk assets worldwide. Several European equity benchmarks on March 09 fell into a bear market, including the Stoxx 600, as an oil-price war added to market jitters about the spreading virus.
While markets were bouncing back on Tuesday, it remains to be seen whether European stocks are returning to a “calmer path” or whether March 09’s sell-off was just the beginning, said Andreas Lipkow, a strategist at Comdirect Bank.
“The distortions we have seen in the past few days, destroyed a lot of trust among the many new players in the international financial markets,” said Lipkow. “Young traders are not aware of any hard market corrections because they have worked in a flourishing stock landscape under the protectorate of the central banks.”