Stock markets shrug off US layoffs

London, United Kingdom | AFP | Stock markets mostly rose and the dollar advanced Thursday, gaining traction from optimism over reopening economies and a huge EU coronavirus recovery package, dealers said.

Asia bounded higher but Hong Kong failed to maintain early gains as investors fretted over a US decision to revoke the city’s special status that could see it lose key privileges, bringing into doubt its future as a global financial hub.

Meanwhile, another 2.12 million people filed for unemployment in the United States last week, pushing total layoffs since the start of the coronavirus crisis to more than 40 million, a level not seen since the Great Depression, the Labor Department said.

The new filings, however, showed that the pace of the layoffs was subsiding as the US economy slowly begins to reopen.

Wall Street stocks inched higher at the opening of trade.

In European afternoon trading, London stocks climbed 1.4 percent, with Paris following with a 1.3 percent gain and Frankfurt with a 0.9 percent increase.

Oil markets recovered after slumping on news Wednesday of a surprising jump in US stockpiles, denting hopes of a pick-up in energy demand in the world’s biggest economy.

– Bullish sentiment grows –

“Stock markets in Europe are showing decent gains … as the optimism in relation to economies being reopened is doing the rounds,” said CMC Markets analyst David Madden.

“Everybody is painfully aware of the lockdowns, but as they are being loosened, the bullish sentiment keeps growing.

“The various steps taken to try and return to normal life are small, but they are significant as any progress is welcomed.”

Europe’s bourses had vaulted higher Wednesday after EU leaders unveiled a vast 750-billion-euro ($825-billion) proposal to the European Parliament and member states.

If passed, the deal — which aims to help the worst-affected countries with a mix of grants and loans — would be the biggest EU stimulus package ever.

Markets extended gains Thursday as investors also looked past building China-US tensions, though worries remain about the uncertain global outlook.

Hong Kong stocks shed 0.7 percent after China’s parliament endorsed plans to impose a security law on the city, which would punish secession, subversion of state power, terrorism and acts that endanger national security.

“Beijing has made it very clear that it is not afraid of the US and it is going to do what it thinks is right,” noted ThinkMarkets analyst Naeem Aslam.

“The geopolitical tensions have seriously anchored up, but market players are still not paying much attention to this.”

The US decision over Hong Kong’s status is the latest volley in an increasingly acrimonious row between the world’s two economic superpowers, with Donald Trump’s accusations over Beijing’s part in the coronavirus outbreak, Huawei and trade also causing friction.

– Las Vegas to reopen casinos –

Despite the threat of another trade war, investors are focusing on the easing of lockdowns around the world, with communities from Asia to Europe to the US slowly coming out of hibernation.

Adding to the upbeat mood was news that Disney plans to reopen its Florida theme parks, and a decision by Nevada’s governor to let Las Vegas casinos reopen with restrictions.

Trillions of dollars in stimulus and central bank support have also provided dealers with much-needed confidence, including the latest EU stimulus package.

“This is Europe’s moment,” EU Commission chief Ursula Von der Leyen said, adding: “We either all go it alone, leaving countries, regions and people behind… or we walk that road together.”

– Key figures around 1330 GMT –

London – FTSE 100: UP 1.4 percent at 6,228.81 points

Frankfurt – DAX 30: UP 0.9 percent at 11,761.64

Paris – CAC 40: UP 1.3 percent at 4,750.94

Milan – FTSE MIB: 2.1 percent at 18,285.90

Madrid – IBEX 35: 0.8 percent at 7,229.80

EURO STOXX 50: UP 1.1 percent at 3,083.83

New York – Dow: UP 0.6 percent at 25,697.36

Tokyo – Nikkei 225: UP 2.3 percent at 21,916.31 (close)

Hong Kong – Hang Seng: DOWN 0.7 percent at 23,132.76 (close)

Shanghai – Composite: UP 0.3 percent at 2,846.22 (close)

Brent North Sea crude: UP 0.2 percent at $34.82 per barrel

West Texas Intermediate: UP less than 0.1 percent at $32.82 per barrel

Euro/dollar: UP at $1.1038 from $1.1006 at 2100 GMT

Dollar/yen: UNCHANGED at 107.72 yen

Pound/dollar: UP at $1.2297 from $1.2261

Euro/pound: DOWN at 89.71 pence from 89.77 pence