FTSE 100 LIVE: Eurozone stocks rally amid EU plan to prop up struggling economies

The eurozone equities index finished 1.1 percent higher after jumping as much as 1.6 percent, while the pan-European STOXX 600 closed up 0.2 percent. Under the proposal, the European Commission would borrow the funds from the market and then disburse two-thirds in grants and the rest in loans, with much of the money going to Italy and Spain, the worst affected by the pandemic. Spain’s banking-heavy IBEX jumped 2.4 percent, with Banco Santander SA and BBVA rising 4.9 percent and 3.4 percent respectively.

Euro zone banks .SX7E climbed 4.8 percent, with French lenders BNP Paribas SA and Societe Generale SA leading gains. Italy’s banking index .FTIT8300 rose 2.6 percent.

“The size of the market reaction is relatively modest if you compare it to the plan itself, but that is because there were quite some expectations in the market,” said Elwin de Groot, head of macro strategy at Rabobank.

“We really have to see this is a reaction to the size of the programme being bigger and the European Commission not being deterred from the opposition that is visible in some member states.”

A Franco-German proposal for 500 billion euros in grants last week faced some resistance from more frugal northern nations, which wanted only loans.

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7.06am update: EU leaders expect delay in agreement 

Despite the EU putting forward a landmark financial recovery aid package, some have insisted it will take time. 

One Dutch diplomat told Politico: “The positions are far apart and this is a unanimity file, so negotiations will take time.

“It’s difficult to imagine this proposal will be the end state of those negotiations.”  

Known as the ‘Frugal Four’, Holland, Austria, Sweden and Denmark were sceptical of an overly inflated financial package based on grants and a large budget. 

7.03am update: Hong-Kong index drops 

The Hang Seng Index has fallen 1.16 percent today after a gradual drop from the beginning of trading. 

The index is currently at 23,028.48 points at the time of writing, 270 down. 

Additional reporting by Rachel Russell. 

6.02am update: American Airlines says to cut management and support staff by 30 percent

American Airlines Group Inc must reduce its management and support staff by about 30 percent and may have to cut frontline employees as it downsizes due to the coronavirus outbreak, showed a letter to employees made public on Wednesday.

All major US airlines have said they will need to shrink in the fall, once US government payroll aid that bans involuntary job cuts expires on Sept. 30.

Competitor United Airlines Holdings Inc has also said it will need to reduce its management and administrative staff by about 30 percent.

Despite the bailout and other liquidity raises, American must “plan for operating a smaller airline for the foreseeable future,” Executive Vice President of People and Global Engagement Elise Eberwein said in the letter.