Market surge continues, despite economic fears

Stocks in Europe and the US are on the rise, with hopes of an impending reversal in coronavirus mortality sustaining an optimistic outlook. Meanwhile, travel firms surge as government bailouts become increasingly likely. 

• European markets move higher despite late pullback
• FTSE 250 and AIM stocks outperform as virus peak nears
• Travel in focus, with airlines receiving £1 billion boost

Stocks in Europe are easing back into the close, yet the bullish sentiment that has permeated throughout markets at the start of this week has remained in play today. With market focusing on the weeks ahead, traders have been striking an optimistic tone as we see a number of countries turn the tide on the coronavirus. The outperformance of UK indices outside of the FTSE 100 highlights both the underperformance in SMEs, and the feeling that perhaps the hugely detrimental shutdown could be shorter than many had previously speculated. While the likes of the AIM and FTSE 250 would be more likely to see underfunded companies that may be less able to weather the storm, they also provide oversized  opportunities if this crisis is less damaging than previously thought. Unfortunately, this is likely to be a false dawn, for the only way to keep a cap on hospital admissions is to maintain highly restrictive limits on movement that are hugely detrimental to UK businesses. 

Travel firms enjoyed a sharp leg higher today, with transport minister Chris Heaton-Harris signalling that we could see the Government taking a stake in some of the hardest-hit airlines. While the governments part ownership of RBS and Lloyds was deemed a negative given the restrictions it placed on high-risk/high-reward behaviour, airlines would be less hamstrung by a bailout. The air traffic controller decision to delay £1 billion of fees provided another rare piece of good news today, alleviating some of the financial pressures for the time being. Nevertheless, major questions remain for the sector, with the IATA speculating that the refunding of cancelled flights could soon see airlines  run out of cash