US stocks have staged a recovery following their worst day since the 2008 financial crisis, while the FTSE 100 again found itself in negative territory.
In the US, the S&P 500 and Nasdaq both enjoyed their biggest percentage gains since December 2018.
The Dow Jones finished up 4.89% – gaining more than 1,100 points. The S&P 500 was up 2.8% and the Nasdaq rose by 4.69%.
Among the big gainers were airlines and cruise ship stocks – battered by a fall in demand for travel since the coronavirus outbreak.
American Airlines jumped 15.3% and Delta Air Lines rose 4.5%. Royal Caribbean Cruises climbed 7% and Carnival rose 10.5%.
The gains reflect hopes that government and limited central bank aid will have a real effect on limiting damage to the global economy in the months to come as the coronavirus crisis deepens.
One reason for the change in sentiment was Donald Trump announcement of “major” steps to guard the US economy against the impact of the coronavirusoutbreak.
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In London, the FTSE rose by just over 1.2% at the open but closed down 0.9%. The early surge was partly aided by a recovery in Brent crude oil, which was trading at just under $37 a barrel following Monday’s price collapse.
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Monday had seen a crash in values globally, blamed on a surge in COVID-19 cases and Saudi threats of an oil price war, which combined to send investors running for the hills.
It culminated in the fifth-biggest one day fall in the FTSE’s history, while trading in US shares was suspended after declines triggered so-called circuit breakers, designed to help limit intense volatility.
Gains fluctuated when Saudi Arabia confirmed plans to raise production by 2.6 million barrels per day in April, to record levels, following Russia’s refusal to help stabilise prices through output cuts.
Energy, travel, and mining stocks were seeing the greatest relief in London, with TUI, easyJet and Shell leading the way.
The MIB in Italy – a country under lockdown to fight the spread of COVID-19 – closed down 3.2% after a fall of 11% on Monday.
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In the UK, the Bank of England has been working in co-ordination with the Treasury on how businesses can be supported ahead of possible supply chain disruption.
Among companies reporting their progress to the City on Tuesday, the furniture retailer DFS said it had just started to see an impact on customer numbers.
It refused to give guidance on expectations for the 12 months to June as the outbreak evolves but said it would expect weaker sales volumes in the short term to catch up later in the year.
Safestay, the hostel operator, warned of a “material reduction” in new bookings and cancellations.
The budget on Wednesday is expected to be used to announce support for UK firms – as chancellor Rishi Sunak pledges to give the NHS what it needs to deliver the best possible care.