Global stocks gain on plans to ease anti-virus controls

BEIJING (AP) – Global stocks gained yesterday after France and Spain joined governments that plan to ease anti-virus controls and allow businesses to reopen.

London and Frankfurt opened higher, while Shanghai and Hong Kong advanced. Japanese markets were closed for a holiday. Wall Street retreated overnight, hurt by declines in healthcare and tech stocks that have been among the winners during the coronavirus pandemic.

The French and Spanish governments announced plans on Tuesday to allow restaurants and other businesses to reopen gradually. They followed Italy, which announced similar plans on Sunday.

“Reopening hopes continue to characterise the market despite the slight pullback for Wall Street,” Jingyi Pan of IG said in a report.

In early trading, London’s FTSE advanced 0.7 per cent to 6,001.78 and the DAX in Frankfurt added 0.1 per cent to 10,813.19. The CAC 40 in France shed 0.1 per cent to 4,562.55.

A currency trader at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea. PHOTO: AP

On Wall Street, the future for the benchmark S&P 500 index was 0.8 per cent higher and that for the Dow Jones Industrial Average was up 0.7 per cent.

On Tuesday, the S&P 500 lost 0.5 per cent and the Dow slipped 0.1 per cent. The Nasdaq, dominated by tech stocks, fell 1.4 per cent.

In Asia, the Shanghai Composite Index closed 0.4 per cent higher at 2,822.44 and Hong Kong’s Hang Seng added 0.3 per cent to 24,643.59. The Kospi in Seoul advanced 0.7 per cent to 1,947.56.

The ASX-S&P 200 in Sydney gained 1.5 per cent to 5,393.40 while India’s Sensex added 1.7 per cent to 32,657.03. Singapore and Jakarta gained 0.4 per cent while New Zealand shed 0.9 per cent.

Investors who want to know when the deepest global downturn since the 1930s might end have been encouraged by plans to reopen factories, retailing and travel. Economists warn they are too optimistic and say evidence is mounting that the damage is even worse than forecast.

Yesterday, New Zealand allowed construction sites, restaurants and some other businesses to reopen following a decline in new virus cases.

South Korea’s government reported March industrial production increased by 4.6 per cent compared with the previous month.

“We won’t get too many positive reports on activity in Asia over the coming months, so we should probably make the most of this one,” said Rob Carnell of ING in a report.

In the United States (US), some governors are rolling back curbs and allowing restaurants, hair salons and other businesses to reopen despite warnings by health experts that moving too fast might lead to new outbreaks.

President Donald Trump, running for re-election amid a slump that has wiped out more than 10 million jobs, is pressing other governors to lift lockdowns. Governor Andrew Cuomo of New York, one of the hardest-hit and most populous states, said controls will be eased only after numbers of new cases decline.

Elsewhere, Singapore on Tuesday extended its lockdown by four weeks after reporting its highest one-day toll of new cases a day earlier. India also reported a one-day record for new infections on Monday.

Many professional investors are skeptical of the US stock market’s big rally, which has driven the S&P 500 up 28 per cent from its March low. They are wary of how fast stocks have rebounded despite the gradual pace of resuming business activity.

The yield on the 10-year US Treasury fell to 0.61 per cent on Tuesday from 0.65 per cent late Monday. Yields tend to fall when investors are downgrading expectations for the economy and inflation.

In energy markets, benchmark US crude for June delivery gained USD1.81 to USD14.18 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost 44 cents the previous day to settle at USD12.34. Brent crude, used to price international oils, added 72 cents to USD23.46 per barrel in London. It rose 47 cents on Tuesday to USD20.46.

The dollar declined to JPY106.51 from Tuesday’s JPY106.86. The euro advanced to USD1.0868 from USD1.0847.