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Bloomberg
Global stock markets are starting the week with a bang after China’s influential state media stoked bullish enthusiasm. The dollar fell for a fifth day and Treasuries dipped.
Banks, construction and insurance shares pushed the Stoxx Europe 600 Index higher, and UK homebuilders rallied after a report that the government is considering a temporary increase in the threshold at which buyers pay stamp duty. Copper is on the cusp of erasing this year’s losses.
A front-page editorial in China’s Securities Times on Monday said that fostering a “healthy†bull market after the pandemic is now more important to the economy than ever. Chinese social media exploded with searches for the term “open a stock account,†with bullish sentiment also lifting the yuan. The Shanghai Composite Index closed up 5.7%, the biggest advance since 2015.
The MSCI World Index is now at the highest level since early June, with investors putting their faith in an economic recovery powered by historic government stimulus.
But there’s a long way to go before the economy gets back to normal. Goldman Sachs Group Inc. cut estimates for US growth this quarter and said consumer spending appears likely to stall this month and next. Still, economists led by Jan Hatzius said other economies have proved it’s possible to resume activity and changes in behavior such as wearing masks will help too.
“The willingness of investors to look through the current disruption to an anticipated recovery this quarter is imperiled by still rising virus infection rates,†said Michael McCarthy, a markets strategist at CMC Markets Plc in Sydney.
Futures on the S&P 500 Index increased 1.3% as of 9:12 am London time and the Stoxx Europe 600 Index gained 1.7%.
The MSCI Asia Pacific Index climbed 1.7% and the MSCI Emerging Market Index climbed 2%.
While the Bloomberg Dollar Spot Index declined 0.3%, the euro advanced 0.4% to $1.1281. The British pound increased 0.1% to $1.2482 and the Japanese yen weakened 0.1% to 107.60 per dollar.
While the yield on 10-year Treasuries advanced three basis points to 0.69%, Germany’s 10-year yield increased one basis point to -0.43%. Britain’s 10-year yield gained three basis points to 0.204%.
While West Texas Intermediate crude advanced 1.9% to $40.94 a barrel, gold strengthened 0.3% to $1,776.15 an ounce. LME copper also gained 1.3% to $6,074 per metric ton.