Equities extend gains on hopes of easing crisis
HONG KONG: The easing of lockdowns around the world and signs that economies are slowly recovering provided further impetus for stock markets yesterday but traders remain on edge over China-US tensions and growing unrest across several large American cities.
Donald Trump’s decision not to impose strict sanctions on Beijing over its Hong Kong security law allowed investors to get June off to a healthy start, while a slowdown in virus infections and deaths globally continues to keep the mood positive.
Europe pressed ahead with a further loosening of measures, with schools, pools, pubs and tourist sites reopening—despite fears of a second wave of infections—providing hope that shattered economies can begin to rebuild. Data showing improvements in factory activity in some countries, particularly badly hit Italy, also gave traders hope.
“May’s data suggested the worst of the contraction may be behind us, but we see a bumpy restart in coming months,” BlackRock Investment Institute strategists said in a report. Tokyo
and Seoul rose more than one percent after data showed South Korea’s economy shrank less than first expected in the first quarter, while a Hong Kong rally of 1.1 percent extended Monday’s more than three percent rise.
Shanghai added 0.2 percent, Mumbai jumped 0.9 percent and Sydney put on 0.3 percent, with Taipei 0.4 percent higher. Kuala Lumpur, Manila and Wellington piled on more than one percent and Jakarta rallied more than two percent. Singapore rose more than two percent as the city began easing its own shutdown measures.
In early trade, London rose 0.2 percent and Paris climbed 0.8 percent even after the French government said the economy is expected to shrink 11 percent this year—worse than a previous forecast of eight percent.
Frankfurt soared more than two percent. Investors appeared to brush off news that China had ordered its staterun agricultural firms to temporarily halt buying some US farm goods, which raised questions about the impact on the countries’ trade pact signed in January. “Digging a little deeper, private companies were not issued the same orders and the exercise... appears to be more a shot across the bows of the US over Hong Kong, and not an imminent threat of withdrawal from the USChina trade agreement,” said OANDA’s Jeffrey Halley. — AFP