Stock markets are staging a tentative recovery on Tuesday following their worst day since the 2008 financial crisis.
Monday saw 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 100’s history while trading in US shares was suspended after declines triggered so-called circuit breakers, designed to help limit intense volatility.
Donald Trump, who has hailed record stock market values in recent times as a trophy of his presidency ahead of November’s election, later announced he would be taking “major” steps to guard the US economy against the impact of the COVID-19 outbreak.
He told the American people that a cut in payroll tax was among measures being considered to support workers and businesses.
Market analysts credited expectations of government support in the world’s largest economy for boosting sentiment on stock markets on Tuesday.
Japan’s Nikkei put on 0.8% while the Hang Seng in Hong Kong was more than 1.7% up in late trading.
Financial spreadbetters expected the FTSE 100 in London to gain 3% – aided by an 8% recovery in Brent crude oil which was trading at $37 a barrel in Asia following Monday’s collapse.
US futures pointed to rises of more than 3% when Wall Street opens.
It reflects hopes that the fiscal response – the Trump administration’s promises of support – will have a real effect in the months to come as the coronavirus crisis deepens.
The market largely shrugged off a big cut in interest rates by the Federal Reserve a week ago as it failed to solve the potential for a crisis of supply ahead.