Global stocks follow Wall Street higher on recovery hopes
Global stock markets were mostly higher Wednesday as hopes for economic recovery rose after more governments eased anti-virus controls.
London, Shanghai and Hong Kong followed Wall Street higher while Frankfurt and Sydney declined. Japanese markets were closed for a holiday.
Investors are increasingly optimistic as European countries and some U.S. states allow businesses to reopen despite warnings coronavirus infections still are rising in areas such as Brazil and economic recovery could be some way off.
President Donald Trump, running for re-election during a slump that has thrown more than 30 million Americans out of work, said Tuesday he wants the U.S. economy to reopen but acknowledged some people will be “badly affected.” Asked whether there might be deaths as curbs ease, Trump told ABC News, “It’s possible there will be some.”
“The view that the benefit outweighs the costs had invited the market to largely shrug off the concerns here,” despite Trump’s “acknowledgement of more fatalities,” Jingyi Pan of IG said in a report.
In early trading, London's FTSE 100 gained 0.1% to 5,855.76 while the DAX in Frankfurt shed just under 0.1% to 10,719.98. France's CAC 40 lost 0.1% to 4,477.57.
On Wall Street, futures for the benchmark S&P 500 index and Dow Jones Industrial Average were up 0.7%.
On Tuesday, the S&P 500 closed 0.9% higher, boosted by technology and health care stocks, and the Dow advanced 0.6%. The Nasdaq climbed 1.1%.
In Asia, the Shanghai Composite Index climbed 0.3% to 2,878.14 and Hong Kong's Hang Seng added 1.1% to 24,137.48. The Kospi in Seoul was 1.8% higher at 1,928.76 and India's Sensex gained 1.2% to 31,830.43.
Sydney's S&P-ASX 200 lost 0.4% to 5,384.60. Benchmarks in New Zealand and Singapore advanced while Jakarta declined. Bangkok was closed for a holiday.
Many analysts are skeptical about Wall Street's rally. They say it is overdone given uncertainty about how long the recession will last. But the S&P 500 has recovered more than half its losses in a sell-off earlier in the year.
China, where the pandemic began in December, has allowed factories and some other businesses to reopen. France, Spain and other European governments are taking similar steps.
U.S. states including Texas and South Carolina have allowed restaurants and some other businesses to reopen. California might allow some retailers to resume serving customers this week.
Still, the deputy chairman of the U.S. Federal Reserve, Richard Clarida, said Tuesday the economy needs more support from the central bank and possibly additional government spending before it can recover.
Hopes that economic revival will boost energy demand has helped to lift oil prices that had plunged to record-setting lows.
Benchmark U.S. crude gained 13 cents to $24.71 per barrel in electronic trading on the New York Mercantile Exchange. The contract jumped 20.5% on Tuesday to settle at $24.56.
Brent crude, used to price international oils, rose 18 cents to $31.15 per barrel in London. It gained 13.9% the previous session to close at $30.97.
The dollar declined to 106.37 yen from Tuesday’s 106.53 yen. The euro declined to $1.0795 from $1.0841.