NEW YORK, July 9 ― Global stocks rose yesterday as recovery hopes overcame fears that a surge in coronavirus cases would slow the US economy, but many investors still sought safety on pandemic worries, driving gold prices above US$1,800 (RM7,695) an ounce for the first time since 2011.
Stocks on Wall Street rose, and the Nasdaq marked a record closing high, boosted by technology shares, while demand for the dollar, a traditional safe harbour, slid even as the number of confirmed US coronavirus cases surpassed 3 million. Still, demand for the dollar proved remarkably stable given Wall Street's strength.
Yousef Abbasi, global market strategist at StoneX Group Inc in New York, said US investors in particular are still comfortable with the idea of buying secular growth or select companies they think will thrive in a low-consumption economy.
While materials, industrial and bank stocks were lower, Abbasi said, other sectors were delivering gains.
“If you're in an industry where your focus is in technology, such as enterprise software or e-commerce, providing the backbone for those businesses, you've been rewarded hand over fist,” Abbasi said.
The technology-rich Nasdaq finished at a record closing high, the fourth time in five days.
But investor sentiment remains tenuous as the pandemic resurges in the United States and elsewhere. Oil prices were steady as rising US crude inventories and the coronavirus surge put the brakes on a recent recovery.
The MSCI world equity index, a gauge of equity markets in 49 nations, rose 0.63 per cent and its emerging markets index jumped 1.77 per cent as investors continue to pour into Chinese equities.
“There is certainly a rush from retail to buy Chinese stocks,” Abbasi said. “Trading volumes are eclipsing their normal levels.”
The pan-European STOXX 600 closed down 0.67 per cent as investors assessed the risk of more restrictive social distancing measures in some places and upcoming quarterly earnings reports.
Analysts expect companies listed on the STOXX 600 to report a 53.9 per cent decline in profit in the second quarter, according to Refinitiv data.
London-listed HSBC shed 3.4 per cent after Bloomberg reported US President Donald Trump's top advisers had weighed proposals to undermine the Hong Kong currency's peg to the dollar, which could limit access to the greenback by Hong Kong banks.
“It is impossible for investors not to grow weary and eventually, at some point, fall prey to the endless drip of negative Covid-19 stories and how the second-wave virus will crush the market,” said Stephen Innes, chief global market strategist at AxiCorp.
The economy would likely suffer as some US states reimpose coronavirus-related restrictions, but another nationwide shutdown would be “a big mistake,” White House economic adviser Larry Kudlow said.
On Wall Street, the Dow Jones Industrial Average rose 177.1 points, or 0.68 per cent, to 26,067.28. The S&P 500 gained 24.63 points, or 0.78 per cent, to 3,169.95 and the Nasdaq Composite added 148.61 points, or 1.44 per cent, to 10,492.50.
In China, stocks extended their gains to seven sessions, with the blue-chip index up 1.6 per cent to its highest close since June 2015.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 1.1 per cent, just off the prior day's four-and-a-half-month high.
Coronavirus cases were also on the rise in the Australian state of Victoria, which led to lockdown measures being re-imposed in Melbourne, the country's second-biggest city.
Bond markets were focused on a meeting yesterday of European Union officials to discuss the shape of the EU's recovery fund.
Yields on German 10-year government debt were unchanged at -0.441 per cent, just above a one-week low of -0.495 per cent.
The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.4 per cent to 96.493. The euro was up 0.54 per cent while the yen was down 0.26 per cent at US$107.2300.
Spot gold rose 0.81 per cent to US$1,808.74 an ounce. US gold futures settled 0.6 per cent higher at US$1,820.60 an ounce.
Brent crude futures rose 21 cents to settle at US$43.29 a barrel, while US crude futures settled up 28 cents at US$40.90 a barrel. ― Reuters