LONDON: Further easing of coronavirus lockdowns pushed 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 NYSE trading floor reopened after two months of closure, was more than 600 points higher in the late New York morning.
“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 1pc 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 1.9pc 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”.
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.
Published in Dawn, May 27th, 2020