LONDON, June 19 — Equities rose today as investors weighed up hopes of a quick economic recovery against fresh virus worries and geopolitical tensions.
After three months of big gains for global stock markets — fuelled by the reopening of economies as well as trillions of dollars in government and central bank support — and a volatile week, indices appeared to be levelling out as investors awaited the next major catalyst, such as a vaccine for Covid-19.
While countries continued to ease lockdowns, the virus spiked again in several places including Beijing, Tokyo, Germany, Florida and Texas.
“Concerns over the spread of Covid-19 in some US states in particular where hospitalisation rates are rising, and also following the recent outbreak in Beijing, continue to cast something of a pall over markets,” said Ray Attrill at National Australia Bank.
Adding to the unease were simmering tensions between the two Koreas — as well as between China and India following a deadly border skirmish this week in the Himalayas.
President Donald Trump provided fresh uncertainty by tweeting that the US “certainly does maintain a policy option, under various conditions, of a complete decoupling from China”, but observers still saw it as unlikely the superpowers would break off all economic activity.
Bloomberg News today said that Beijing planned to boost its imports of farm goods including soybeans and corn from the US, easing concerns about the trade pact signed in January, which had been called into question owing to rising tensions.
Elsewhere today, the British pound struggled to bounce back from yesterday’s drop that came after the Bank of England unveiled more cash stimulus to prop up the UK economy battered by the virus.
Oil prices rose again on optimism over the demand outlook as lockdowns eased.
“What’s become clear this week is that any second wave isn’t going to necessarily prompt governments to return to draconian lockdowns,” said Vandana Hari at Vanda Insights.
On the corporate front, the chief executive of scandal-hit Wirecard resigned today after the German payments provider was hit with fresh fraud allegations that have left it struggling to survive.
Auditors yesterday said €1.9 billion (RM8.9 billion) were missing from Wirecard’s accounts, sending its share price plummeting by more than 80 per cent this week.
Key figures around 1100 GMT
London — FTSE 100: UP 1.3 per cent at 6,305.18 points
Frankfurt — DAX 30: UP 1.1 per cent at 12,412.23
Paris — CAC 40: UP 1.3 per cent at 5,021.47
EURO STOXX 50: UP 1.3 per cent at 3,291.38
Tokyo — Nikkei 225: UP 0.6 per cent at 22,478.79 (close)
Hong Kong — Hang Seng: UP 0.7 per cent at 24,643.89 (close)
Shanghai — Composite: UP 1.0 per cent at 2,967.63 (close)
New York — Dow: DOWN 0.2 per cent at 26,080.10 (close)
West Texas Intermediate: UP 2.4 per cent at US$39.78 per barrel
Brent North Sea crude: UP 1.9 per cent at US$42.30 per barrel
Euro/dollar: UP at US$1.1204 from US$1.1203 at 2030 GMT
Dollar/yen: DOWN at 106.92 from 106.99 yen
Pound/dollar: DOWN at US$1.2382 from US$1.2422
Euro/pound: UP at 90.48 pence from 90.18 pence — AFP
