European stocks rise as attention turns to EU stimulus fund

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European stocks have rallied as traders prepare for an EU meeting to discuss the block’s 750 billion euro coronavirus recovery fund and a heavy file of economic news and global companies this week.

The regional benchmark Stoxx 600 opened 1% Monday, helped up by the Xetra Dax in Frankfurt which gained 1.4%. The London FTSE 100 added 1.3%. Futures for the US S&P 500 increased 0.5%.

Optimism is growing among investors ahead of the EU stimulus fund summit on Friday, as the US earnings season starts this week.

European and US stocks have struggled to find the momentum to continue their upward acceleration in the past month as coronavirus cases and deaths continue to spoil the US recovery.

Economists also said they were cautious in interpreting sharp rebounds in global economic indicators since overall activity remains deeply depressed relative to pre-coronavirus levels.

“Incoming economic data continues to support our central narrative of a global economy that has taken off after the closings, but with expectations for a bumpy ride,” said Barclays economists.

Asia Pacific stocks started the week with gains, traders hoping this week’s data would show a return to Chinese economic growth in the second quarter.

The Japanese benchmark Topix rose 2.5% in the late Monday afternoon in Asia, while the Australia S & P / ASX 200 rose 1% and the South Korean Kospi by 1, 7%.

The Chinese CSI 300 of stocks listed in Shanghai and Shenzhen rose 1.9%, while the Hang Seng index in Hong Kong rose 0.7%.

Mainland China stocks posted their best week in five years last week as investors rallied in a rally supported by signs of economic recovery and support from state media. The country’s stock market increased by 18% in 2020, while the benchmarks in Europe and the United States remained down over the year.

The gains came despite the fear that the spike in coronavirus cases in a number of US states could jeopardize economic recovery.

Florida became the first state to report more than 15,000 cases in a single day on Sunday, as infections continued to increase in the southern part of the country – a trend that is forcing most affected states to impose new restrictions.

Wall Street will be in the spotlight as the profit season kicks off this week, with Citigroup and JPMorgan Chase among the first US banks to publish their report.

Economists predict that the Chinese economy will return to annual growth in the second quarter, after a 6.8% drop in GDP in the first quarter, the first annual decline in more than four decades.

Evidence of a recovery in China would come at a time when fears of new coronavirus outbreaks in Asia persist, with Hong Kong experiencing a new wave of cases in the past week. Melbourne, Australia’s second largest city, has been subjected to a new six-week lockdown as authorities try to curb a new epidemic.

US treasury yields fell slightly, while gold prices rose 0.4% to $ 1,806 an ounce, after exceeding $ 1,800 last week for the first time since 2011. Data showed that traders poured $ 40 billion into gold-backed funds in the first half. of the year.

Oil prices fell, Crude Brent, the international benchmark, falling 0.7% to $ 42.94 per barrel.

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