Stock markets surge on swift recovery hopes

By AFP
 Growing optimism about a swift global economic recovery pushed equity markets sharply higher
Wednesday, as investors took heart from further easing of lockdowns while looking past China-US tensions and civil unrest across America.
The upbeat mood — and hopes for an extension to a massive oil output cut agreement — resulted in Brent crude futures breaking the $40-mark for the first time in nearly three months, before profit-taking kicked in.
Governments in Europe and Asia have become confident enough to lift containment measures that have likely pushed the world economy into recession and destroyed tens of millions of jobs.
“The lifting of lockdown restrictions combined with enormous central bank support means investors are shrugging off little things like collapsing GDP and worsening US-China tension,” said Neil Wilson at trading site Markets.com.
In Europe, the London, Frankfurt and Paris indices were all solidly higher at the closing bell.
On Wall Street, the Dow Jones surged more than two percent, while the Nasdaq climbed to within striking distance of an all-time high.
US data remains terrible, with data showing 2.8 million people losing jobs in May and anemic sentiment in the services sectors. Still the reports were not quite as bad as expected.
While most economic data remain “dismal,” the reports “are becoming less bad at the margins,” said Quincy Krosby, chief market strategist at Prudential Financial.
“Absent a second wave (of the coronavirus), the US economy is gaining strength, albeit slowly,” Krosby added.
Besides the weak data, investors also looked past a US order to suspend all flights by Chinese airlines into and out of the United States in the latest example of growing friction between the world’s two largest economies.
Earlier, Tokyo and Hong Kong stock markets closed up more than one percent, while Sydney put on 1.8 percent after data showed the Australian economy contracted at a slower rate than feared in the first quarter — though it remains on course for its first recession in nearly 30 years.
Oil prices got a lift from a Russian report that a new oil output cut deal had been agreed behind the scenes between Moscow and Riyadh.
“The most bullish outcome for oil from the meeting is no sign of squabbling between Russia and Saudi Arabia,” whose price war earlier this year helped send prices crashing, said Stephen Innes of AxiCorp.
“Headlines suggest they are on the same page on supply, and that’s bullish for oil in the context of an improving demand backdrop.”
Key figures around 2110 GMT
New York – Dow: UP 2.1 percent at 26,269.89 (close)
New York – S&P 500: UP 1.4 percent at 3,122.87 (close)
New York – Nasdaq: UP 0.8 percent at 9,682.91 (close)
London – FTSE 100: UP 2.6 percent at 6,382.41 (close)
Frankfurt – DAX 30: UP 3.9 percent at 12,487.36 (close)
Paris – CAC 40: UP 3.4 percent at 5,022.38 (close)
EURO STOXX 50: UP 3.5 percent at 3,269.59 (close)
Tokyo – Nikkei 225: UP 1.3 percent at 22,613.76 (close)
Hong Kong – Hang Seng: UP 1.4 percent at 24,325.62 (close)
Shanghai – Composite: UP 0.1 percent at 2,923.37 (close)
West Texas Intermediate: UP 1.3 percent at $37.29 per barrel
Brent North Sea crude: UP 0.6 percent at $39.79 per barrel
Euro/dollar: UP at $1.1232 from $1.1170 at 2100 GMT
Dollar/yen: UP at 108.92 yen from 108.68 yen
Pound/dollar: UP at $1.2573 from $1.2551
Euro/pound: UP at 89.33 pence from 89.00 pence