TOKYO (AP) — Global stock markets rose yesterday as more economies reopened for business after long and painful shutdowns to contain the coronavirus pandemic.
While the social unrest in the United States (US) continued to provide a gloomy backdrop, international investors remained focus on the prospects for global economic growth.
More countries and sectors are reopening, though activity is expected to remain subdued as social distancing rules complicate plans to get back to business.
Futures for the Dow and the S&P 500 indexes on Wall Street were up 0.6 per cent and 0.5 per cent.
In Europe, France’s CAC 40 jumped 2.1 per cent to 4,863 as the country opened restaurants, cafes, parks and beaches and launched a contract tracing app to help keep tabs on new contagions. Germany’s DAX, which had been closed on Monday, caught up with previous global markets’ gains and surged 3.9 per cent to 12,033. Britain’s FTSE 100 added one per cent to 6,2130.
Japan’s benchmark Nikkei 225 rose 1.2 per cent to finish at 22,325.61, and Hong Kong’s Hang Seng gained 0.8 per cent to 23,912.07. South Korea’s Kospi added 1.1 per cent to 2,087.42. Australia’s S&P/ASX 200 rose nearly 0.3 per cent to 5,835.10, while the Shanghai Composite edged up 0.1 per cent to 2,918.94.
In Southeast Asia, where shutdowns are beginning to ease, Indonesia’s benchmark jumped nearly two per cent and Singapore’s surged 2.3 per cent.
Despite the bright mood across, fears persist about a possible resurgence in coronavirus outbreaks in some countries.
There were 34 new confirmed cases in Tokyo yesterday, seeming to reaffirm growing risks as people begin to mingle more in crowded commuter trains with the reopenings of more offices, schools, restaurants and stores. The daily numbers had dropped below 20 recently.
Critics had said Japan’s relaxation of its pandemic precautions was premature, and Japanese media reported that Tokyo Governor Yuriko Koike plans to announce a “Tokyo Alert” requesting residents of the capital to try harder at social distancing.
Despite such concerns and the widespread unrest erupting in many US cities, hopes for a quick recovery from the worst global downturn since the 1930s have spurred recent rallies.
The protests that have rocked American cities for days have so far not had much impact on financial markets. But the violence and damage to property may hinder the re-opening of the economy. Crowds gathering to protest injustice and racism also could touch off more outbreaks.
But Robert Carnell, regional head of research for the Asia-Pacific region at ING, warned against too much optimism.
“How long can markets remain buoyant?” he asked. “The honest answer, and one that may save you five minutes is, ‘I don’t know’.”
This week will provide market watchers more insight on the impact that the coronavirus is having on US workers and employers. Payroll processor ADP issues its May survey of hiring by private US companies today. The next day, the government releases its weekly tally of applications for unemployment aid.
On Friday, the government reports its May labour market data. Analysts surveyed by FactSet expect the report will show the economy lost nine million jobs last month.
Tomorrow, the European Central Bank is expected to provide more stimulus for the economy of the 19-country eurozone as more countries fall into a deep recession.
In other trading, benchmark US crude oil added 81 cents to USD36.25 a barrel in electronic trading on the New York Mercantile Exchange. It fell five cents to USD35.44 a barrel on Monday. Brent crude oil, the international standard, gained 89 cents to USD39.21 a barrel.
The dollar rose to JPY107.83 from JPY107.58. The euro climbed to USD1.1161 from USD1.1136.