US stocks fell tonight as New York State followed California in ordering non-key workers to stay at home and the UK caught up with the rest of Europe by ordering the closure of pubs and cafes to fight the deadly Covid-19 outbreak.
Governments and central banks around the world continued to scramble to prevent the world economy slumping into a deep recession.
However, in an ominous sign at the end of a tumultuous week for global markets, US stock indices chalked up further losses despite many European shares having earlier closed slightly higher after a number of European governments stepped in to pledge aid for their national airlines and flagship manufacturers.
The IMF urged governments to learn from China and do much more to save millions of jobs and support businesses from going bust, citing several measures Beijing had taken to help its vulnerable businesses, including cancelling utility bills.
Global central banks, including the ECB and the US Federal Reserve, took measures to boost liquidity through the weekend.
Davy chief economist Conall MacCoille was the latest forecaster to warn the Irish economy will slide into a recession this year, under the scenario of a prolonged lockdown and severe financial hit to businesses and households.
However, Mr MacCoille’s central forecast projects GDP will still grow strongly this year if there is only a temporary “short-sharp shock” to the economy.
With many other economists, Mr MacCoille suspects the Government will be forced to spend more and increase the €3bn worth of measures it has already announced to tackle the Covid-19 outbreak, “especially if further health spending is required”.
Austin Hughes, chief economist at KBC Bank Ireland, said earlier this week the Government will need to spend an extra €12bn for a total spend of €15bn if it is to shield employers and jobs from even greater damage.
Many business groups welcomed the Government’s decision to defer the payment of commercial rates for three months but called for more business support.
Credit union group ILCU pressed the Central Bank and Department of Finance to lessen capital reserve requirements to help credit unions members.
Continental Europe’s leading stock indices, the Cac-40 in Paris and Dax in Frankfurt gained up to 5% as France announced financial funds for Air-France KLM and Airbus, while Denmark and Sweden pledged help for airline SAS.
London’s Ftse-100 closed only 0.7% higher and Ireland’s Iseq ended almost 4% higher.
The gains posted by many Irish shares in yesterday’s session failed to offset the huge losses made during the week.
AIB shares were up 3.5%, meaning the shares have lost over 20% value in the last two days alone. Bank of Ireland gained over 2%.
Dalata Hotel Group climbed 11% and stock market-listed insurer FBD rose 5%, but with both having suffered significant losses.
Ryanair shares gained almost 6% and IAG (owner of Aer Lingus, British Airways, and Iberia) rose 12% in London. Airlines in Europe have been fighting for survival as more cities are locked down.
C&C shares fell 1% as it updated the market on the fallout from the virus crisis.