US and European stocks were higher yesterday, recovering from the previous day’s rout on rising new coronavirus cases in the United States and data denting hopes for a strong recovery from the pandemic devastation.
The scale of the damage was highlighted by news that the British economy shrank 20.4% month-on-month in April, a sharp reality check after the near euphoria of recent weeks.
Analysts said the figures were awful but at least everyone knew that April was going to be the worst month, with all depending on how May and June go.
On that score, US consumer confidence figures were surprisingly good, bolstered as state authorities began to ease coronavirus restrictions.
The University of Michigan consumer sentiment index jumped to 78.9 from 72.3 in May, much better than economists had expected.
“Consumer sentiment posted its second monthly gain in early June, paced by gains in the outlook for personal finances and more favourable prospects for the national economy due to the reopening,” said Richard Curtin chief economist of the Survey of Consumers.
Curtin cautioned however that while consumers are expecting things to get better, few anticipate a return to normalcy “anytime soon.”
In New York, the DJIA opened with a sharp advance of 2.7% but then slipped back to show a gain of around 1.5% yesterday.
On Thursday, the DJIA slumped nearly 7%.
In Europe, markets finished well off their highs and Frankfurt closed in the red, shedding 0.18% to 11,949.28 points.
London’s FTSE 100 index finished up 0.5 at 6,105.18 points while in Paris, the CAC 40 added 0.49% to 4,839.26 points.
“As if it was not already clear that we are living through extraordinary times, investors are piling back into stock yesterday after a sharp sell-off a day earlier,” Craig Erlam, analyst at trading group OANDA, said earlier in the European trading day.
“While yesterday’s 6.9% plunge in the Dow is not even in the top three worst days this year, it is still a quite remarkable daily drop historically.
“Today’s rebound may not last...but these markets are very strange and I wouldn’t be surprised if it’s instead being perceived as a ‘buy the dip’ opportunity.”
Asian markets fell but losses were relatively modest by their close.
In London, the FTSE 100 closed up 0.5% to 6,105.18 points; Frankfurt — DAX 30 ended down 0.2% to 11,949.28 points; Paris — CAC 40 closed up 0.5% to 4,839.26 points and EURO STOXX 50 ended flat at 3,145.06 points yesterday.
from Gulf Times https://ift.tt/2zsjFV3
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