Stock markets rise as reopenings trump geopolitical tensions

London, United Kingdom | AFP | Further easing of countries’ coronavirus lockdowns pushed equities higher Tuesday, with optimism stoked by the reopening of bars, cafes, pools and beaches outweighing China-US tensions that hurt the dollar.

While countries including Brazil, Chile and Russia are enduring rising death and infection tolls 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 at the opening bell.

“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 higher by one percent or more, with London playing catch-up after strong eurozone gains 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, saying fears its 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 US-China relations which he said “will be a constant headwind for stock markets”.

Elsewhere Tuesday, oil markets 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 virtually double in value this month.

– Key figures at around 1330 GMT –

London – FTSE 100: UP 1.0 percent at 6,055.71 points

Frankfurt – DAX 30: UP 1.0 percent at 11,502.77

Paris – CAC 40: UP 1.4 percent at 4,604.03

EURO STOXX 50: UP 0.9 percent at 2,997.18

New York – Dow: UP 2.5 percent at 25,076.21

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 3.4 percent at $34.37 per barrel

Brent North Sea crude: UP 2.4 percent at $36.97 per barrel

Euro/dollar: UP at $1.0973 from $1.0896 at 2100 GMT Friday

Dollar/yen: DOWN at 107.49 yen from 107.71 yen

Pound/dollar: UP at $1.2348 from $1.2195

Euro/pound: DOWN at 88.90 pence from 89.35 pence