Europe Markets

European markets close higher as Fed unveils $2.3 trillion stimulus plan

Key Points
  • The pan-European Stoxx 600 closed up by 1.4% provisionally.
  • Jobless claims in the U.S. continued to surge amid the coronavirus shutdown.
  • The Fed unveiled new stimulus measures worth up to $2.3 trillion.

European markets closed higher Thursday as investors digested the latest U.S. jobless data and a $2.3 trillion stimulus package from the Federal Reserve. 

The pan-European Stoxx 600 closed up by 1.4% provisionally, with travel and leisure stocks jumping over 4% to lead gains as all sectors traded in positive territory. With no trade on Friday, due to the Easter holiday, the benchmark finished up over 7% on the week. 

Jobless claims in the U.S. continued to surge amid the coronavirus shutdown, with 6.6 million Americans filing first-time unemployment claims in the week ended April 4, the Labor Department reported Thursday

Economists were expecting an increase of 5 million after the record-shattering prior two readings of 6.6 million and 3.3 million. Economists forecast that the unemployment rate will jump into the teens this month, from March's 4.4% level and the 3.5% in February.

But the disappointing unemployment data was cushioned by news that the Fed would implement new stimulus measures worth up to $2.3 trillion. On Wall Street, equities reacted positively and the Dow Jones Industrial Average looked to be on track for its best weekly gain since 1938.

Back in Europe, the Bank of England agreed to temporarily finance U.K. government borrowing if funds cannot immediately be raised from debt markets, a measure last seen significantly during the financial crisis.

Meanwhile, Swiss banks UBS and Credit Suisse announced that they will postpone paying out part of their 2019 dividend to shareholders until later this year, bowing to mounting pressure on the European banking sector from regulators.

Biggest movers

Cinema chain Cineworld gained over 27% to lead the Stoxx 600, while British business outsourcing giant Capita was up 20%. 

British housebuilder Redrow jumped nearly 10% after securing approval for the Bank of England's coronavirus emergency financing scheme on Thursday.

At the other end of the European blue chip index, engineering firm Subsea 7 finished 5% lower, while Swiss logistics group Galenica dropped more than 6%.