Stock markets climb on recovery hopes

By: AFP      Published: 07:26 PM, 19 Jun, 2020
Stock markets climb on recovery hopes

Equities rose Friday as investors weighed up hopes of a quick economic recovery against fresh virus worries and geopolitical tensions.

The euro rose against the dollar after European leaders met via video conference seeking agreement on the details of a 750-billion-euro stimulus package for their economies -- and German Chancellor Angela Merkel said there were no disagreements about the principle of joint borrowing. 

On Wall Street, the Dow was up around 300 points shortly after the opening bell while key European markets were all over one percent higher.

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 China and India following a deadly border skirmish this week in the Himalayas.

'Don't mess with recovery'

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 on Friday said Beijing planned to boost 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.

"US-China relations are not entering a period of calm by any means, but this latest breakthrough suggests both sides don't want to mess with their respective fragile economic recoveries," said Edward Moya at OANDA.  

The British pound struggled to bounce back from Thursday's drop that came after the Bank of England unveiled more cash stimulus to prop up the virus-battered UK economy.

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 on Friday after the German payments provider was hit with fresh fraud allegations that have left it struggling to survive.