Though off their intraday highs, the markets clung onto their rebound on Wednesday, trying their best to ignore the IMF’s warnings.
The Washington-based institution became the latest body to slash GDP forecasts, stating that ‘global growth in 2020 will dip below last year’s levels’. For reference, the IMF was previously expecting worldwide growth of 3.3% against 2019’s 2.9%.
It refused, however, to be drawn into exact forecasts, not only for the globe, but for China. Talking of the superpower, the IMF would only say that previous growth estimates are ‘no longer valid’.
This dose of reality – which came alongside a jump in UK coronavirus cases from 51 to 85 – undid some of the goodwill generated by the World Bank’s $12 billion stimulus pledge, taking the Western indices from their highs.
Nevertheless they remained strongly up on the day, the European gains firmed up by a 500 points surge from the Dow Jones. Though that sounds like a big movement, in the context of the last few sessions that doesn’t even recoup the ground lost by the Dow following the Fed’ impromptu rate cut. It was, however, better than the alternative.
The FTSE rose 1.1% to 6780, leaving it 80 points shy of the day’s peak, while the DAX and CAC climbed 160 points and 65 points respectively.