Oil stocks and gain despite soaring coronavirus cases


LONDON (Reuters) – Markets showed optimism on Friday as European stocks opened higher and oil prices rose despite a record number of new COVID-19 infections in the United States.

FILE PHOTO: A man wearing a protective mask walks past the London Stock Exchange Group building in the City of London financial district, London, Great Britain, March 9, 2020. REUTERS / Toby Melville

They rose in the United States by at least 39,818 Thursday, the largest day-long increase in the pandemic. The Texas governor temporarily suspended the reopening of the state on Thursday as infections and hospitalizations increased.

But European stocks opened higher, with the Stoxx 600 up 0.8% and the London FTSE 100 up 1% at 0736 GMT .FTSE.

The MSCI .MIWD00000PUS global equity index, which tracks stocks in 49 countries, rose 0.3%, extending gains from Thursday evening.

“Even if we continue to see pretty scary numbers of viruses coming out of the United States, it’s not really a tainted feeling – not at all in a sustained way,” said Timothy Graf, EMEA macro strategy manager at State Street Global Advisors.

Graf said the recent temporary downward corrections in market optimism have had very little follow-up.

The possibility of a second wave of coronavirus and new blockages has a limited impact on the market, because if blocking measures resume, markets expect it to increase the likelihood of increased budget support for economies .

“There is a disconnect between what you think is the case looking at the virus numbers and the riskier stocks and currencies that are holding up relatively well and volatility is going down, but at the same time we have never seen an answer politics like this, not in the last 80 years at least, “said Graf.

Having increased between 0500 and 0700 GMT, the dollar fell in early London to 97.317 against a basket of currencies at 0745 GMT = USD.

The riskier New Zealand dollar rose 0.2% NZD = D3 after spending most of June at its level before the coronavirus crisis peaked in March.

Oil prices rose on Friday, continuing optimism about a recovery in global fuel demand, despite signs of a recovery in crude oil production in the United States.

West Texas Intermediate (WTI) CLc1 crude futures in the United States rose 26 cents, or 0.7%, to $ 38.98, while Brent LCOc1 crude futures increased 36 cents, or 0.9%, to $ 41.41.

The United States Senate has passed a law that would impose mandatory sanctions on people or businesses that support China’s efforts to restrict Hong Kong’s autonomy, in another potential Sino-American flashpoint.

To become law, it must also pass the House and be signed by President Donald Trump. Support for pro-democracy protests in Hong Kong has declined, although it retains the support of a slim majority, according to a survey for Reuters.

But demand for secure euro area public debt has changed little, with the 10-year German Bund’s yield close to monthly lows, at -0.479% DE10YT = RR.

The 10-year benchmark US10YT = RR Treasury bill yield remained stable at 0.6725%. Gold XAU = increased slightly to $ 1,763.65 per ounce. US / GOL /

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The pandemic is more likely to leave a legacy of low or falling prices for goods and services than to trigger higher global inflation, according to a majority of more than 160 economists polled by Reuters.

The euro area has “probably passed” the worst of the economic crisis caused by the pandemic, said Friday the president of the European Central Bank, Christine Lagarde, while urging the authorities to prepare for a possible second wave.

“We still think the unemployment we are seeing is temporary, we still think that businesses will be able to return to normal, but it is probably fair to think that it is a little too simple,” said Graf of State Street.

Reporting by Elizabeth Howcroft; Editing by Mark Heinrich

Our standards:Principles of the Thomson Reuters Trust.


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