Paris (AFP)

European markets started shyly the week Monday, unlike Wall Street which was moving in the green, American investors anticipating an initiative by central banks to compensate for the air gap caused by the coronavirus epidemic.

After having experienced their most violent weekly decline in twelve years, the European stock markets, following in the footsteps of the Asian markets, closed in dispersed order, at the end of a session marked by multiple hesitations and reversals.

The Paris Stock Exchange closed up 0.44% and the London Stock Exchange 1.13%. Frankfurt for its part lost 0.27%, while Milan experienced another session of sharp decline (-1.50%), Italy having recorded nearly 500 new contamination in 24 hours.

On the Wall Street side, the major indices were evolving clearly in the green, after a chaotic start to the session: shortly before 6:00 p.m. GMT, the Dow Jones - which collapsed by more than 12% last week - took more by 3%, while the Nasdaq jumped 2.8%.

"Equities are rebounding thanks to hopes for fiscal and monetary stimulus" to counter the effects of the coronavirus on the economies of the affected countries, said David Madden, analyst at CMC Markets.

"We are still at the hypothetical stage and the news is still not very reassuring," warned Andrea Tuéni, analyst at Saxo Bank, for whom the market remains very undecided.

While the European Union has raised its risk assessment to "moderate to high", with a final assessment of 2,100 confirmed cases in 18 member countries, the OECD has reduced its global growth forecast from 2.9% to 2, 4% and warned that the impact could be much stronger if the epidemic lasts.

European Commissioner for the Internal Market, Thierry Breton, spoke of the risk of recession in Germany and Italy at the start of the year. He also estimated losses for the European tourism industry at one billion euros per month.

But "faced with this obstacle to global growth, there is no doubt that the central banks will continue and accentuate their ultra-accommodative policies. The Bank of China has already started. The US Federal Reserve (Fed) and the ECB should l 'support', warns Emmanuel Auboyneau, managing partner at Amplegest.

- Towards a monetary and budgetary response -

French Minister Bruno Le Maire announced Monday that the G7 and Eurogroup finance ministers will hold a telephone interview this week to "coordinate their responses" to the impact of the coronavirus on global growth.

The expectation of action from governments and central banks is not new, but it has grown stronger since the President of the United States Federal Reserve (Fed), Jerome Powell, said Friday ready to act to support the economy if it was badly affected.

Investors read in his message the possibility of a further cut in key US rates, potentially as early as this month. They were betting on a rate cut of half a percentage point on Monday - a rare move - at the next Fed meeting on March 17 and 18.

The Bank of England said for its part to work "closely with the Treasury and the FCA (the financial regulator, editor's note) as well as (its) international partners to ensure that everything is done to protect financial and monetary stability ".

Before it, the Central Bank of Japan (BoJ) was clearly committed to intervening to guarantee the stability of the financial markets.

The European Commissioner for the Economy, Paolo Gentiloni, also called on EU countries on Monday to act to support the economy, citing a "coordinated budgetary response from European countries".

"The act will depend on developments on the double front of the epidemic and growth, and its declination should take the form of a wide use of the levers of economic policy available", anticipates Hervé Goulletquer, deputy director of research at the LBPAM.

bur-Pan-jra vab / pn / sl

© 2020 AFP