Global stock markets, oil prices slightly higher

LONDON — World stock and oil markets rallied on Tuesday after the US Federal Reserve (Fed) launched an unprecedented bond-buying plan, the latest salvo in a global fightback against the fallout from the deadly coronavirus outbreak.

European equities charged higher as investors shrugged off grim survey data showing collapsing eurozone and UK business activity in March.

 The dollar beat a retreat from Monday's three-year peak against the euro on the Fed news. In turn, that lifted crude oil prices which have been battered in recent weeks as coronavirus saps demand.

London stocks won more support after Britain became the latest western nation to implement a nationwide lockdown to help curb the spread of COVID-19.

"Stock markets in Europe are higher... as traders picked up the bullish baton from the indices in Asia," said CMC Markets UK analyst David Madden, who also noted that traders had been expecting the "brutal" survey data.

"The Fed's open-ended stimulus scheme, and the talk that Germany and the United States are getting closer to announcing rescue packages of their own is adding to the bullish sentiment.

"Political fighting in the US has prevented a stimulus scheme from being revealed earlier, but dealers are optimistic nonetheless."

US senators remain gridlocked, with Democrats on Monday again blocking a nearly $2 trillion rescue package for the economy.

While much of the planet goes into lockdown, traders gave a massive thumbs up to the US central bank's pledge to essentially print money in a move not seen since the global financial crisis more than a decade ago.

The Fed, which has already slashed interest rates to record lows, said it will buy unlimited amounts of Treasury debt and take steps to lend directly to small- and medium-sized firms hammered by restrictions across the country.

The plan however failed to inspire US traders, with all three main indexes on Wall Street sliding, but equities in Asia rallied with Tokyo ending more than seven per cent higher.

The Nikkei was given extra lift by a Bank of Japan decision to embark on its own massive bond-buying scheme.

 AxiCorp's Stephen Innes called the Fed's move "the most significant monetary experiment in the history of financial markets".

 "Asian investors like what they see from an all-in Fed, which is being viewed in a very impressive light for both Main and Wall Street, even as the US congress dithers."

The weaker dollar also helped lift crude, which has been hammered to recent multi-year lows on the back of a price war between producers Saudi Arabia and Russia.

"Oil is only rallying because the Fed's unprecedented measures finally stopped the stronger dollar," said OANDA analyst Edward Moya.

"Crude prices will have wild swings, but no one is expecting the bottom to be already in place."