LONDON, March 16 — European stock markets went into freefall in early deals today despite massive fresh central bank stimulus to prop up a global economy battered by the coronavirus outbreak.
Paris dived 9.0 per cent, Frankfurt plunged 7.8 per cent, London and Milan tumbled 7.6 per cent, while Spain retreated 8.7 per cent.
“Central banks led by the US shot off a bazooka of lower interest rates and quantitative easing but it has missed (the) target. Markets are back into freefall,” said Jasper Lawler, head of research at traders LCG.
“Friday’s gains have evaporated and shares are headed deeper into bear market territory. Bank shares are leading the market lower.
“The move to cut interest rates down to zero will compress lending margins just as the coronavirus will see the level of non-performing loans skyrocket,” he added.
Shares in airlines also crashed, with carriers including British Airways, Air France and Iberia saying they were slashing their flight capacity.
The US Federal Reserve on Sunday cut borrowing costs to almost zero — its second emergency cut in less than two weeks — and unveiled a massive asset-buying programme, similar to measures put into place during the global financial crisis more than a decade ago.
Today, the Bank of Japan unveiled a series of its own emergency monetary policy measures. — AFP