Shares rose slightly on Monday after a survey showed German corporate morale rebounded in May, sparking optimism about economic reopening, although caution prompted the US dollar to break a rare streak of losses.
The MSCI global equity index gained 0.32%. The pan-European STOXX 600 index rose 0.8%.
The foreclosure measures in place in mid-March have put the global economy on the brink of recession this year. Only the unprecedented stimuli from global central banks have held back global markets in recent weeks.
Nervous investors wary of adding to their equity holdings over concerns about what a post-lockdown world would look like, the German Ifo Institute’s survey for May gave some relief.
Its business climate index fell to 79.5 from 74.2 revised down in April, higher than expected by a Reuters survey, and fueling optimism about the prospects of the largest economy European market after first quarter decline
“Today’s Ifo index is echoing more real-time signals that economic and social activity has started to pick up significantly since the first lifting of the foreclosure measures in late April,” said economists. ING in a note.
“In short, the low point of the crisis should now be behind us and there is even the possibility of a strong, short-lived rebound in the months to come. “
But with the financial markets of Singapore, Britain and the United States closed for public holidays on Monday, market movements have been relatively weak and kept within healthy ranges.
American equity futures gained 1%. The MSCI Asia Pacific ex Japan stock index was 0.3% higher in thin volume.
The upward trend in the stock markets contrasted cautiously in the foreign exchange markets, where the dollar ended a rare weekly loss to reach a week-long high against its rivals.
The dollar, which tends to behave as a safe asset during market turmoil and political uncertainty, gained after China decided to impose a new security law in Hong Kong, which increased concerns about the city’s stability and the prospects for world trade.
Investors were shaken on Friday when Beijing announced details of the security legislation, which critics see as a turning point for the territory.
Sino-US ties have worsened since the coronavirus epidemic, with the administrations of President Donald Trump and President Xi Jinping trading beards on the pandemic, including charges of cover-up and lack of transparency.
“The growing tensions between the United States and China around Hong Kong, trade policy and who is responsible for the economic dislocation of 2020 threaten to end the rally after March,” said perpetual analyst Matthew Sherwood.
The bond markets remained stable, Italy’s 10-year yield at 1.60%, just after the six-week lows recorded on Friday, and German 10-year safe haven yields down 1 basis point to – 0.50%.
Meanwhile, US crude oil rose 32 cents, or 1%, to $ 33.57 a barrel. Brent crude rose 9 cents, or 0.26%, to 35.22.
Spot gold lost 0.3% to $ 1,729.2 an ounce.
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