Global stocks edged higher after Chinese authorities launched new stimulus measures to steady the economy and curtail the impact of the coronavirus outbreak.
The broad advance in global equities came after the People’s Bank of China cut an interest rate in a move that could pave the way for benchmark borrowing rates to be reduced on Thursday. The central bank lowered the one-year medium-term lending facility rate to 3.15% from 3.25%, the latest step it has taken to bolster the Chinese economy during the viral outbreak.
The decision bolstered investors’ confidence that Beijing is taking the necessary steps to prevent the coronavirus—which has sickened at least 71,000 people world-wide and killed more than 1,700—from leading to a significant slowdown in China’s economy.
“The disruption we’re currently experiencing should fade and the level of activity should come back to a normal level and even be stronger than in the first quarter,” said Sophie Chardon, a strategist at Swiss private bank Lombard Odier.
Chinese authorities have been “very active on this front, especially on the monetary front, with the PBOC cutting rates twice,” Ms. Chardon said. “They are actively managing the situation to mitigate the short-term effects of the virus.”