LONDON, Aug 3 — Stock markets in Europe and Tokyo rebounded today, helped by a recovery in manufacturing sectors, with investors scooping up bargains in coronavirus-driven trading.
London’s benchmark FTSE 100 index was up 1.1 per cent in early afternoon deals.
In the eurozone, Frankfurt surged 2.2 per cent and Paris won 1.2 per cent.
Japan’s Nikkei 225 closed up more than two per cent, helped by data showing the country’s economy contracted less than first thought in January-March.
Shanghai put on 1.8 per cent following a forecast-beating reading on factory activity from Caixin, days after a strong official report showed improvement in the manufacturing sector.
A spike in coronavirus infections has forced fresh lockdowns and sparked worries about the impact on the world economy.
A lack of substantial progress by US lawmakers on a new stimulus package has also frustrated traders, while China-US tensions continued as the White House considers measures against Chinese tech firms, citing national security.
With Covid-19 showing no sign of easing globally—total cases topped 18 million today—governments are moving to redeploy containment measures.
Australia’s Victoria state imposed fresh, sweeping restrictions yesterday, including a curfew in Melbourne for the next six weeks, a ban on wedding gatherings in the city, and an order that schools and universities go back online in the coming days.
Britain introduced new measures in several northern counties at the end of last week, while there are reports the government is considering fresh moves to avert another economically painful national lockdown, including sealing off London.
The new wave of infections has fanned fears that a nascent economic recovery will be knocked off track.
“Covid-19 either remains rampant or is making worrying localised comebacks across the world,” said Jeffrey Halley at OANDA.
“Although not priced into financial markets yet, it remains the critical risk factor to global recovery. Particularly if key economies that had previously controlled Covid-19 are forced back into large-scale lockdowns again.”
Congress at loggerheads
Hong Kong’s stock market dropped 0.6 per cent today as the city continues to see more than 100 infections a day, forcing authorities to put ever-tighter measures in place.
Singapore, Mumbai and Taipei were each off more than one per cent.
Virus concerns and a weak dollar caused by a massive programme of US monetary easing helped haven gold to a new record in Asian deals today, topping out at $1,990.84 (RM8,404) an ounce.
Adding to the unease on trading floors was Secretary of State Mike Pompeo’s warning that the White House will unveil measures against “a broad array” of Chinese-owned software.
He said TikTok and other Chinese software companies operating in the US, such as WeChat, feed personal data on American citizens directly to the Chinese Communist Party.
The move would add to a long list of issues that have seen the economic superpowers butt heads—including Hong Kong, Huawei and the coronavirus—and fan concerns about a possible renewal of their trade war. — AFP
