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European shares closed higher on Friday after their worst sell-off in history, as the fast spread of the coronavirus pandemic continues to dominate investor sentiment.
European shares closed higher on Friday, following Thursday’s slump amid coronavirus. On the data front, German Destatis reported that the inflation in Germany rose 1.7% in February, while investors kept their eye on the developments in Italy, which is the hardest-hit country in Europe with COVID-19 outbreak. The coronavirus has now infected more than 140,000 people worldwide, with more than 5,000 deaths, according to the latest figures from Johns Hopkins University.
The pan-European Stoxx 600 rose by 2.5% during afternoon trade, with basic resources up 6.9%, autos up 4.9% and utilities up 4.2% as all sectors and major bourses traded firmly in positive territory.
The DAX closed the session up 0.73%, the CAC 40 rose 1.30%. At the same time, the FTSE 100 increased by 1.65% as the session finished.
The euro fell 1.10% against the dollar at 5:38 pm CET, going for $1.10616. The pound was down 1.62% on the greenback at the same time, changing hands for $1.23659.
Roche’s COVID-19 Test Authorized by FDA
Pharmaceutical company Roche Holding AG (SIX: ROG) announced in a statement the United States Food and Drug Administration (FDA) approved its SARS-CoV-2 detection test.
According to the statement, the FDA green-lighted the Swiss-based company’s test for the virus that causes the COVID-19 disease, giving it emergency use authorization.
The United Kingdom government decided to postpone local and mayoral elections in England until next year as a result of the coronavirus outbreak. Also, British Queen Elizabeth II said she will skip several public events “as a sensible precaution and for practical reasons” amid the coronavirus outbreak.
UK Believes Crisis Is Temporary while European Shares Are Unstable
The impact of coronavirus on the United Kingdom economy was “broadening and moving fast” so far, Minutes from the Governing Council of the Bank of England (BoE) meeting showed. However, the council member asserted that the COVID-19 effect “should be temporary.”
Also, UK Prime Minister Boris Johnson said earlier that up to 10,000 people in the UK may be infected with the virus, while BT confirmed that its CEO Philip Jansen had tested positive for COVID-19.
European Commission President Ursula von der Leyen said on Friday European Union needs to be “determined, coordinated and united.” Commenting some states closing borders due to coronavirus spread, she stated that certain controls may be justified but general travel bans are not seen as the most effective by the World Health Organization. She stressed the EU will establish a €37 billion investment initiative as part of a package of measures to soften the bloc’s economies from the impact of coronavirus.
Eurozone Expected to Contract in 2020
Maarten Verwe, director-general for EU’s economic and financial affairs commented that the Eurozone economy is expected to contract in 2020 due to the negative impact of the coronavirus outbreak.
“It is very likely indeed that growth for the euro area and the EU as a whole will fall below zero this year, and potentially even considerably below zero,” he said.
The Group of Seven (G7) leaders are set to discuss the coronavirus outbreak and further measures in an attempt to curb its impact in a video conference on Monday, French President Emmanuel Macron said on Friday.