Global recession fears drive markets down again despite Fed rate cut – business live

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

The financial panic triggered by the coronavirus pandemic is entering its fourth week, and showing no signs of ending.

It’s shaping up to be another bad day in the markets, despite America’s central bank slashing interest rates to almost zero last night in a fresh emergency move.

The Fed also announced a sweeping range of stimulus measures — including an additional $700bn in asset purchases, and boosted dollar swap lines with fellow central banks including the Bank of England.

The Fed had been expected to cut rates at its meeting on Wednesday, but pulled the trigger early amid signs that a global recession is upon us.

My colleague Dominic Rushe explains:

The Fed’s move marks an unprecedented second emergency rate cut in as many weeks and came ahead of a week that is expected to be marked once more by dramatic moves in the stock markets.

The central bank had been due to meet this week and was widely expected to announce a cut in rates on Wednesday. At a press conference Fed chairman Jerome Powell said he expected a “significant economic effect” from the virus in the “near-term” but that the longer term is still “highly uncertain and, I would say, in fact, unknowable.”

The Fed said it would hold rates at the new, low level “until it is confident that the economy has weathered recent events and is on track” to achieve its twin goals of stable prices and strong employment.

Other central bankers also acted overnight. The Bank of New Zealand slashed borrowing costs to 0.25% from 1%, while the Bank of Japan pledged to pump money into the Tokyo stock market by doubling its purchases of exchange-traded funds.

The Fed also teamed up with the Bank of England, the ECB, the Bank of Japan, the Bank of Canada and the Swiss National Bank to make US dollars available much cheaper to companies on their patch. These new cheaper dollar swap lines will allow banks to borrow US dollars at a rate only just above zero.

But Asian stock markets fell heavily. Japan’s Nikkei closed 2.5% lower, China’s CSI 300 lost 4%, while Australia’s A&P/ASX tumbled by another 9%.

European stock markets are expected to fall around 5% this morning, as the panicky selloff continues.

The FTSE 100 index is tipped to plunge towards 5,100 points for the first time since November 2011.

The recent lockdowns in Italy, Spain and France seem certain to push the eurozone into a sharp recession this year.

Meanwhile, Donald Trump’s ban on air travel from the EU and UK is putting airlines on the brink.. with UK operators calling for an urgent bailout.

The agenda

• 12.30pm: Empire manufacturing survey of US factories in New York state. Likely to fall to 4.40 in March from 12.9 in February