Global shares rise as governments roll out more economic relief

London — Global shares rose on Thursday on hopes the Covid-19 pandemic is nearing a peak and that governments would roll out more stimulus to support their economies, while expectations of a deal to cut oil production bolstered crude prices.

European stock markets gained for a fourth straight day, with investor attention also focused on a meeting of eurozone finance ministers to discuss an economic rescue package.

The pan-European Stoxx 600 index was up 0.5% by midday in London, with battered travel and leisure stocks, automotive and mining companies leading early gains.

MSCI’s all-country world index, which tracks shares across 49 countries, was up 0.3% to its highest since March 12.

US stock futures were flat after bouncing in and out of positive territory in European trading. In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan was up 1.56%, following a strong Wall Street close.

Shares in China, where the new coronavirus first emerged late last year, rose 0.42%. Australian shares were up 2.54%.

“Sentiment remains volatile, but investors appear to be looking through the growing headline numbers of Covid-19 cases and focusing on signs that the spread of the pandemic is being brought under control, which is underpinning hopes for a relatively swift relaxation of containment measures,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Oil prices extended gains on hopes that major producers would agree to cut output when they meet later in the day in response to a collapse in global oil demand.

New York governor Andrew Cuomo said the state’s efforts at social distancing are working in getting the virus under control in one of the biggest hot spots in the US. US President Donald Trump said he would like to re-open the US economy with a “big bang” but that the death toll from the coronavirus first needs to be heading down.

The S&P 500 gained 3.41% on Wednesday, helped by hopes the pandemic is nearing its peak.

The Trump administration has asked lawmakers for an additional $250bn in aid for small US businesses. However, congressional efforts are stalling as Democrats hold out for similar amounts of aid for hospitals and local governments.

While Trump’s optimism helped stoke Wall Street’s rally, recent US data and forecasts are only now beginning to reflect the economic damage. McDonald’s said global comparable sales tumbled 22.2% in March, while Starbucks forecast a 47% drop in second-quarter earnings.

Japan’s Nikkei stock index bucked the regional trend and fell 0.46% as coronavirus infections in the country rose. Markets were also jittery following the government’s declaration of a state of emergency for Tokyo and other urban areas.

The coronavirus has spread rapidly across the world, infecting more than 1.5-million people, of which about 330,000 have recovered, and causing more than 89,000 deaths [as of Thursday].

Wuhan, the Chinese city where the virus emerged late last year, ended its more-than two-month lockdown on Wednesday, but many governments around the world remain nervous about the pace of infections and deaths.

The euro gained against the dollar on hopes eurozone finance ministers would agree on more support for their coronavirus-hit economies. The pandemic is still infecting and killing large numbers of people across Europe and there is no sign the peak of the region’s outbreak has been reached, the EU’s disease monitoring agency said.

Sterling held on to gains against the dollar. Helping confidence was news that British Prime Minister Boris Johnson’s condition is improving. Johnson, who was diagnosed with Covid-19 late in March, was taken to intensive care two days ago after his condition deteriorated.

Against a basket of its peers, the dollar fell 0.04%.

US crude rose 7.45% to $26.96 a barrel. Brent crude rose 4.69% to $34.38 per barrel.

Oil cartel Opec and its allies, including Russia (Opec+) are set to convene a video conference on Thursday. Hopes of an agreement to cut 10-million to 15-million barrels per day (bpd) rose after media reports suggested Russia was ready to reduce its output by 1.6-million bpd.

Reuters