BoE boosts European stocks but recession fears remain

European shares ended higher on Thursday after more emergency stimulus from the Bank of England, although questions remained over whether it would suffice to dampen the economic shock from the coronaries outbreak.
London stocks closed slightly up after the BoE cut interest rates to 0.1% and ramped up its bond-buying. The move followed emergency measures from the European Central Bank earlier on Thursday.
The pan-European STOXX 600 index ended 2.9% higher, although the day's gains were a fraction of the losses incurred over a month-long selling spree. The index has lost more than a third of its value since a record peak hit last month.
"Ultimately none of this will, unfortunately, stop a UK recession, which like most of the developed world, now looks inevitable," wrote James Smith, developed markets economist at ING, and Petra Krpata, chief EMEA FX and IR strategist at ING, referring to the BoE's move and the stimulus package.
"But the hope is that many of these measures can help limit the increase in unemployment, and foster a swifter and smoother recovery when the virus-shutdowns have passed."
Telecom stocks were among the best performing sectors for the day, rising about 4.7% with Jefferies saying that certain facets of the sector could benefit from the outbreak.
Energy stocks jumped more than 3% from a 24-year low, tracking gains in oil prices. However, a price war between major producers and weakening demand due to strain from the outbreak has seen prices wallowing at multi-year lows.
The STOXX 600 had dropped earlier in the day, as the ECB's measures received a lukewarm reception from markets.
"The stimulus package didn't provide much cheer as there is still a perception the health will get worse before it gets better - traders are mindful that we have yet to see the peak of the crisis," said David Madden, Market Analyst at CM Markets in London.
The resources sector was among the few sectors in the red for the day, as heavyweight London-listed miners were slightly pressured by strength in the pound.
The UK's mid-cap FTSE 250 index dropped 1.4% as London braced for a virtual shutdown because of the rapid spread of the virus.
Among individual movers, German pharmaceutical maker Bayer AG ended 3.6% higher as it collaborated with the US government on the coronaries outbreak. Irish lender AI Group bottomed out the STOXX 600, dropping about 24% as Ireland's five retail banks agreed to implement a loan repayment break of up to three months for those affected by the spread of coronaries.