UNITED STATES (AP) – Shares advanced in Europe and Asia yesterday after the S&P 500 climbed to within striking distance of its all-time high set in February. Markets rose in Paris, London, Tokyo and Hong Kong even as the tally of confirmed new coronavirus cases worldwide topped 20 million, according to Johns Hopkins University.
Sentiment got an extra boost from United States (US) President Donald Trump’s announcement that he plans to cut taxes on capital gains and on middle income earners.
Germany’s DAX jumped two per cent to 12,942.82 while the CAC 40 in Paris also gained two per cent, to 5,008.60. Britain’s FTSE 100 surged 1.8 per cent to 6,161.97. The future contract for the S&P 500 climbed 0.5 per cent to 3,368.60 while that for the Dow industrials rose 0.7 per cent to 27,875.00.
Investors are looking to Washington for a fresh lifeline for the US economy, which pancaked into recession as the pandemic gained ground in the spring. On top of the rising number of coronavirus counts around the world, uncertainty has grown with widening antagonisms between the US and China, the world’s largest economies.
The latest move in their escalating tensions was China’s announcement of unspecified sanctions against 11 US politicians and heads of organisations promoting democratic causes, including Senators Marco Rubio and Ted Cruz.
The two sides are scheduled to hold virtual trade talks at the end of the week. Overnight, the S&P 500 rose 0.3 per cent, to 3,360.47, after wavering between small gains and losses. The benchmark index is now within one per cent of its last record high.
A flood of government spending and monetary stimulus, with central banks buying assets to keep credit cheap, have kept markets rising since March.
“With the Fed buying credit and indirectly saving US stocks, traders should not expect any major corrections even if the selling of tech stocks persists deeper into the trading week,” Edward Moya of Oanda said in a commentary. The Hang Seng in Hong Kong added 2.1 per cent to 24,890.68, while the Nikkei 225 climbed 1.9 per cent to 22,750.24. In South Korea, the Kospi picked up 1.4 per cent to 2,418.67. Sydney’s S&P/ASX 200 advanced 0.5 per cent to 6,138.70, while the Shanghai Composite index gave up earlier gains, dropping 1.2 per cent to 3,340.29.
India’s Sensex gained 0.8 per cent to 38,495.84.
The yield on the 10-year Treasury rose to 0.59 per cent from 0.58 per cent.
Benchmark US crude oil for September delivery gained 38 cents to USD42.32 per barrel in electronic trading on the New York Mercantile Exchange. It rose 72 cents on Monday to settle at USD41.94 a barrel. Brent crude oil for October delivery picked up 30 cents to USD45.29 per barrel. It rose 59 cents to USD44.99 a barrel overnight. The price of gold fell USD44.00 to USD1,995.70 per ounce.