HONG KONG, May 26 — A further easing of lockdown measures across the world continued to push equities higher today, with the reopening of bars, cafes, pools and beaches overshadowing China-US tensions.
Hong Kong was among the big gainers as the Hang Seng ate away at a loss of more than five per cent suffered on Friday after China proposed a security law for the city that has many fearing for the future of the financial hub.
While some countries such as Brazil, Chile and Russia are enduring rising death and infection tolls, an increasing number of governments are seeing their figures tail off enough to attempt to get society back to some form of normal.
“The positive take on the mobility data suggests fear about the coronavirus is ebbing,” said Stephen Innes of AxiCorp.
“Government support during lockdowns has given many people income to spend. If anxiety is not too significant, they will rush out to shopping malls.
“Ultimately, the consumer will need to do the bulk of the heavy lifting so confidence to get out of the house and start to live a normal life... will be critical to this recovery.”
Adding to the broadly positive outlook is optimism about progress on a vaccine, which would allow the shattered global economy to start bouncing back.
But Chris Iggo, at AXA Investment Managers, added: “That does not mean we should ignore the risk of second waves, prolonged weak growth and geopolitical issues.”
Tokyo rose more than two per cent and Sydney jumped nearly three per cent, while Shanghai, Taipei, Seoul, Jakarta, Bangkok and Wellington were more than one per cent up apiece.
London jumped more than two per cent, while Paris and Frankfurt added more than one per cent.
Singapore also put on more than one per cent on hopes for fresh stimulus measures by the city-state, as the government warned the economy could shrink as much as seven per cent this year.
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Hong Kong rose 1.9 per cent, with analysts saying investors took some heart from comments by China’s point man in the city who said the proposed new security law would not affect the financial hub’s judiciary, autonomy or “one country, two systems” policy.
Today, city leader Carrie Lam also sought to reassure investors, saying fears its business-friendly freedoms were at risk were “totally groundless”, and reasserted the pledge over “the independence of the judiciary, the various rights and freedoms enjoyed by people”.
Beijing’s decision to push the law on Friday sent the Hang Seng tumbling more than five per cent and ramped up already high tensions with Donald Trump, who has continually hit out at China for its alleged role in the spread of the coronavirus.
But National Australia Bank’s Rodrigo Catril said that while their standoff is simmering, “equity investors appear more interested in the prospect of economies reopening around the globe”.
Crude markets pushed on with their recovery, having suffered a spectacularly bad April when WTI crashed below zero.
The reopening of economies and a massive cut in output by some of the world’s top producers has helped the US benchmark virtually double in value this month.
“The market is starting to witness the effect of output cuts along with a reduction in inventories, while the global economy is on its path to recovery,” Will Sungchil Yun, of VI Investment Corp, told Bloomberg News.
“Still, there’s caution with the absence of a cure for the pandemic as well as the possibility of a second wave of infections.”
Key figures at around 0810 GMT
Tokyo – Nikkei 225: UP 2.6 per cent at 21,271.17 (close)
Hong Kong – Hang Seng: UP 1.9 per cent at 23,384.66 (close)
Shanghai – Composite: UP 1.0 per cent at 2,846.55 (close)
London – FTSE 100: UP 2.2 per cent at 6,123.33
West Texas Intermediate: UP 3.7 per cent at US$34.47 per barrel
Brent North Sea crude: UP 2.5 per cent at US$36.42 per barrel
Euro/dollar: UP at 1.0936 from 1.0896 at 2100 GMT Friday
Dollar/yen: UP at 107.83 yen from 107.71 yen
Pound/dollar: UP at US$1.2261 from US$1.2195
Euro/pound: DOWN at 89.20 pence from 89.35 pence
New York – Dow: Closed for public holiday
— AFP
