Global Stocks Rise As Recovery Signs Offset New Lockdowns

In this file photo Traders work during the opening bell at the New York Stock Exchange (NYSE) on March 19, 2020, at Wall Street in New York City. Johannes EISELE / AFP
In this file photo Traders work during the opening bell at the New York Stock Exchange (NYSE) on March 19, 2020, at Wall Street in New York City. Johannes EISELE / AFP

 

 

Equities rose Thursday following a record lead from Wall Street, with investors cheered by hopes for a vaccine, more positive economic data and further lockdown easing in Europe.

The developments helped offset a worrying spike in infections in the United States, which has led to the reimposition of containment measures that could slow recovery in the world’s top economy, and warnings of worse to come.

Hong Kong led the gains on reopening after a one-day break, despite concerns about a new security law imposed on the city by China that observers said was more draconian than feared and could impact its future as an attractive business hub.

And while there are worries about the issue causing further friction between Beijing and the West, markets remain positive for now.

The Hang Seng Index rose more than two percent, while Shanghai ended up 2.1 percent.

Sydney, Mumbai, Seoul, Wellington and Bangkok were all up more than one percent, while Manila also chalked up more than two percent gains.

Taipei, Singapore and Jakarta were all in positive territory.

Tokyo ended up 0.1 percent with signs of a flare-up in new cases in the Japanese capital weighing on sentiment.

London and Paris opened 0.7 percent higher, while Frankfurt piled on one percent.

The gains came after another all-time high for the tech-heavy Nasdaq on Wall Street, with investors now awaiting the release of key US June jobs data later in the day for a better grip on the economy following May’s surprise jump in employment.

There was some cheer as figures from payroll services firm ADP showed a 2.37 million increase in private jobs — slightly below forecasts — though it added that 3.06 million posts were created in May, a revision from its initial report of 2.76 million lost.

Adding to signs that the worst of the economic hit may have passed, US factory activity began growing again, while the rise in German retail sales was four times more than expected in May.

Meanwhile, hopes for a vaccine were given a boost after Germany’s BioNTech and US pharmaceutical giant Pfizer reported positive preliminary results from a joint project, which showed positive antibody responses.

Europe continued with its lockdown easing, with the EU reopening its borders to visitors from 15 countries, while Spain and Portugal held a ceremony to free up their land border.

And the Netherlands confirmed the lifting of measures imposed on its brothels and red light districts.

Europe opens, US closes

“It’s been a risk-positive start to the new quarter, starting as the old one went out, with more positive data surprises out of the US and encouraging news regarding potential coronavirus vaccine development,” said National Australia Bank’s Ray Attrill.

But he warned of a “need to be on guard for the recent stalling or even reversal of social distancing restrictions in many US states prompting setbacks in some of these readings in coming months.”

There are increasing worries over a second wave of infections elsewhere, led by the United States, which on Wednesday reported more than 50,000 new cases for the first time and several US states imposed 14-day quarantines on visitors ahead of the July 4 weekend celebrations.

California suspended indoor dining at restaurants in Los Angeles and several counties, while New York scrapped plans to allow restaurants to seat customers inside from next week.

Apple announced it would close another 30 US stores on Thursday, half of them in California.

And the World Health Organization warned that with more than 10 million known infections worldwide and more than 500,000 deaths, the pandemic is “not even close to being over”.

“There’s this inherent tension between health of the economy and health of the population,” said David Lebovitz, a strategist at JPMorgan Asset Management.

“It’s going to be the way to think about what drives markets over the next couple of weeks or months.”

– Key figures around 0720 GMT –
Hong Kong – Hang Seng: UP 2.2 percent at 24,955.55

Tokyo – Nikkei 225: UP 0.1 percent at 22,145.96 (close)

Shanghai – Composite: UP 2.1 percent at 3,090.57 (close)

London – FTSE 100: UP 0.7 percent at 6,201.10

West Texas Intermediate: UP 0.6 percent at $40.06 per barrel

Brent North Sea crude: UP 0.6 percent at $42.30 per barrel

Euro/dollar: UP at $1.1272 from $1.1249 at 2100 GMT

Dollar/yen: UP at 107.51 yen from 107.43 yen

Pound/dollar: UP at $1.2492 from $1.2468

Euro/pound: UP at 90.23 pence from 90.19 yen

New York – Dow: DOWN 0.3 percent at 25,734.97 (close)

 

 

 

-AFP

Global Stocks Rise On Hopes For Economic Rebound, Vaccine

 

Further easing of coronavirus lockdowns pushed global equities higher on Tuesday, with optimism stoked by the reopening of bars, cafes, pools and beaches outweighing China-US tensions that have hurt the dollar.

While countries including Brazil, Chile and Russia are enduring rising death tolls and infection rates from COVID-19, an increasing number of governments are seeing figures tail off.

“Once again, the markets embraced an optimistic outlook… setting aside fears over the long-term economic impact of the pandemic and the ever-growing tensions between the US and China to focus on another round of global easing measures,” said Connor Campbell, analyst at trading group Spreadex.

Adding to the broadly positive outlook was optimism about progress on a possible vaccine, which would allow the shattered global economy to start bouncing back.

But Chris Iggo at AXA Investment Managers warned, “That does not mean we should ignore the risk of second waves, prolonged weak growth and geopolitical issues.”

Wall Street, where the New York Stock Exchange trading floor reopened after two months of closure, finished higher, with the Dow gaining 2.2 percent to 24,995.11.

READ ALSO: Pandemic Creating ‘Lockdown Generation’ As One In Six Youths Stop Work – UN

“US stock markets are gearing up for a strong start to the week as further lockdown easing and some more promising vaccine news lifted sentiment after the bank holiday weekend,” said Craig Erlam, senior market analyst at OANDA Europe.

Key European markets were all one percent or more higher at the closing bell, with London playing catch-up after a strong eurozone performance on Monday, though its gains were capped by a rising pound.

Earlier, Asian markets had closed higher, with Tokyo rising more than two percent, and Hong Kong up 1.9 percent as city leader Carrie Lam sought to reassure investors.

She said fears that Hong Kong’s business-friendly freedoms were at risk from a planned Chinese national security law were “totally groundless”.

But OANDA’s Erlam warned that whatever good news may be looming on the COVID-19 front stood to be undermined by worsening relations between Washington and Beijing, which he said “will be a constant headwind for stock markets”.

US President Donald Trump warned that Hong Kong could lose its status as a global financial center if the proposed Chinese crackdown goes ahead.

Critics fear the law could be a death blow to the city’s treasured liberties, which are crucial to making it an international financial center on a par with New York and London.

Oil prices pushed on with their recovery, having suffered a spectacularly bad April when WTI crashed below zero.

The reopening of economies and a massive cut in output by some of the world’s top producers has helped the US benchmark WTI virtually double in value this month.

– Key figures at around 2040 GMT –

New York – Dow: UP 2.2 percent at 24,995.11 (close)

New York – S&P 500: UP 1.2 percent at 2,991.77 (close)

New York – Nasdaq: UP 0.2 percent at 9,340.22 (close)

London – FTSE 100: UP 1.2 percent at 6,067.76 (close)

Frankfurt – DAX 30: UP 1.0 percent at 11,504.65 (close)

Paris – CAC 40: UP 1.5 percent at 4,606.24 (close)

EURO STOXX 50: UP 0.9 percent at 2,999.22 (close)

Tokyo – Nikkei 225: UP 2.6 percent at 21,271.17 (close)

Hong Kong – Hang Seng: UP 1.9 percent at 23,384.66 (close)

Shanghai – Composite: UP 1.0 percent at 2,846.55 (close)

West Texas Intermediate: UP 3.3 percent at $34.35 per barrel

Brent North Sea crude: UP 1.8 percent at $36.17 per barrel

Euro/dollar: UP at $1.0984 from $1.0898 at 2100 GMT Friday

Dollar/yen: DOWN at 107.54 yen from 107.71 yen

Pound/dollar: UP at $1.2335 from $1.2191

Euro/pound: DOWN at 89.04 pence from 89.39 pence.

AFP