European Shares Seen Higher At Open

European stocks may edge higher on Friday, though underlying sentiment would remain cautious on growing worries about coronavirus pandemic.

Investors are bracing for an extended lockdown in Italy after the death toll in the Mediterranean country reached 3,405 on Thursday, overtaking China’s death total of 3,248.

China reported no new domestic coronavirus cases for the second consecutive day, but there were 39 newly confirmed COVID-19 cases on the Chinese mainland, all of which were imported.

Globally, there are currently 245,651 confirmed cases and 10,050 deaths from the coronavirus outbreak.

Millions of people could die from the deadly virus, particularly in poor countries, if it is allowed to spread unchecked, UN Secretary-General Antonio Guterres warned Thursday and appealed for a coordinated global response to the pandemic.

The global economy is already in a recession as the hit to economic activity from the coronavirus pandemic has become more widespread, according to economists polled by Reuters.

Bank of America said it’s clear America has entered a recession caused by the coronavirus and its effect on the nationwide economy. The U.S. economy could shrink 14 percent next quarter, a JP Morgan economist said.

Asian markets remain mostly higher after Reuters reported citing sources that China is likely to unleash trillions of yuan of fiscal stimulus to revive an economy facing its first contraction in four decades.

The Federal Reserve said it would establish a temporary swap lines with other nine central banks as part of coordinated action to improve liquidity in the financial markets.

In a joint statement, the Fed said it will extend U.S. dollar liquidity arrangements with the Reserve Bank of Australia, the Banco Central do Brasil, the Danmarks Nationalbank, the Bank of Korea, the Banco de Mexico, the Norges Bank, the Reserve Bank of New Zealand, the Monetary Authority of Singapore, and the Sveriges Riksbank.

The dollar edged down slightly, helping gold prices rise about 1 percent. Oil extended steep gains from the previous session after U.S. President Donald Trump hinted he may intervene in the price war between Saudi Arabia and Russia at an “appropriate time”.

Overnight, U.S. stocks posted solid gains after governments and central banks around the world moved aggressively to try to buffer the global economy from fallout stemming from the coronavirus pandemic.

The Dow Jones Industrial Average rallied 1 percent, the tech-heavy Nasdaq Composite jumped 2.3 percent and the S&P 500 added half a percent.

European stocks advanced on Thursday after Bank of England’s surprise rate cut and European Central Bank’s announcement of an emergency bond purchase scheme.

The pan European Stoxx 600 soared 2.9 percent. The German DAX climbed 2 percent, France’s CAC 40 index spiked as much as 2.7 percent and the U.K.’s FTSE 100 advanced 1.4 percent.

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