Some parts of the world are slowly getting back to normal, with South Korean students returning to school, but there are worries about the long-term impact of the crisis on economies
London (AFP) - Stock markets picked up Wednesday on hopes for a US economic rebound even though retailers reported mixed results and US-China tensions continued to mount.
Equities have enjoyed a broad advance for several weeks as virus infection and death rates slow overall, allowing some governments to lift strict stay-at-home measures that have hammered businesses.
But, while there was a general feeling the worst is past, increased China-US tensions continue to cast a shadow over trading floors.
Meanwhile, the dollar declined against its main rivals, while oil prices rose.
Global markets have been weighing hopes for an economic rebound as more countries relax confinement measures after a flood of expected but dreadful data on unemployment, business outlooks and consumer confidence.
The World Bank warned the crisis could leave about 60 million people in extreme poverty, and estimated that the global economy might contract by five percent this year.
Markets in Europe were mixed earlier in the day, but perked up when New York weighed in, and the Dow Jones index continued to gain 1.7 percent in midday trading.
“US equities are showing signs of resilience after the testimonies from both Fed Chair (Jerome) Powell and Treasury Secretary (Steven) Mnuchin remind (that) more stimulus is likely just around the corner,” remarked Edward Moya at online broker OANDA.
Meanwhile, US retail giant Target reported an 11.3 jump in first quarter sales to $19.6 billion, but also a 64.3 percent drop in profits owing to higher costs that included bonuses to hourly workers and extra cleaning related to the coronavirus pandemic.
But, “if recent price action is any guide, stock markets will continue to opt for the positive narratives, even as investors wait for this summer’s dire earning season, expected to be one of the worst on record,” said IG chief market analyst Chris Beauchamp.
Tokyo closed with a gain of 0.8 percent and Hong Kong edged 0.1 percent higher, while Shanghai dipped 0.5 percent and Singapore shed 0.9 percent.For sub
London, Paris and Frankfurt all ended the day in positive territory.
Meanwhile, investors kept tabs on Washington, where Democrats in the House of Representatives have passed a $3 trillion aid bill, to add to a similar stimulus already agreed.
Republicans in the Senate are unlikely to push it through, saying existing measures should first flow through the economy.
Analysts have warned that the deep divisions on Capitol Hill, particularly with the presidential election looming in November, will likely mean a new deal cannot be expected any time soon.
- Key figures around 1600 GMT -
London - FTSE 100: UP 1.1 percent at 6,067.16 points (close)
Frankfurt - DAX 30: UP 1.3 percent at 11,223.71 (close)
Paris - CAC 40: UP 0.9 percent at 4,496.98 (close)
EURO STOXX 50: UP 1.4 percent at 2,942.39
New York - Dow: UP 1.7 percent at 24,612.47
Tokyo - Nikkei 225: UP 0.8 percent at 20,595.15 (close)
Hong Kong - Hang Seng: UP 0.1 percent at 24,399.95 (close)
Shanghai - Composite: DOWN 0.5 percent at 2,883.74 (close)
Brent North Sea crude: UP 1.0 percent at $35.61 per barrel
West Texas Intermediate: UP 1.1 percent at $33.10
Euro/dollar: UP at $1.0977 from $1.0927 at 2110 GMT
Dollar/yen: DOWN at 107.49 yen from 107.66 yen
Pound/dollar: UP at $1.2251 from $1.2242
Euro/pound: UP at 89.62 pence from 89.15 pence