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GLOBAL MARKETS-Shares cruise to three-month highs, dollar under protest pressure

Stock Markets Jun 02, 2020 23:12
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© Reuters.

(Adds graphic)

* European shares climb to highest since early March

* German DAX plays catch up after day off

* U.S. unrest and China-U.S. worries rumble in background

* Dollar nurses losses after Monday's tumble

By Marc Jones

LONDON, June 2 (Reuters) - World stocks climbed to three-month highs on Tuesday as the global coronavirus recovery effort won out over U.S.-China tensions and the worst civil unrest in the United States in decades.

U.S. President Donald Trump's vow to use force to end violent protests and reports that China had ordered U.S. soybean purchases to be halted had caused a brief wobble in Wall Street futures, but Europe got shares back on track. .N .EU

The STOXX 600 .STOXX jumped over 2% and Germany's DAX .GDAXI surged nearly 4% after a holiday on Monday as Lufthansa's board approved its government bailout and carmakers shone. Volkswagen VOWG_p.DE , Daimler DAIGn.DE and BMW BMWG.DE shares all leapt over 6% on talk of a 5 billion- euro government-funded car buying scheme. .EU

The euro EUR= hit a two-and-a-half-month high too as the dollar struggled with its home-grown strains /FRX , and Italian and Spanish bonds were still being helped by a proposed 750 billion-euro EU stimulus plan and European Central Bank buying. GVD/EUR

"In a way, it is remarkable that the market remains in this positive mood," said Elwin de Groot, head of macro strategy at Rabobank. "Even with these rising protests in the U.S. and the situation in Hong Kong at the moment, the market is pushing on and seeing room for optimism."

Demonstrators, angered over the recent death of 46-year old African American George Floyd in police custody, had set fire to a mall in Los Angeles overnight, looted stores in New York and at least five U.S. police had been hit by gunfire. Street futures ESc1 had dipped in Asia but Europe dragged them back up in its slipstream ahead of U.S. trading. .N

World stock markets .MIWD00000PUS have rallied nearly 36% from March lows on hopes for a swift recovery from the coronavirus-induced collapse in world growth. The tech-heavy Nasdaq is now only 3% from its pre-virus record highs. .N

May Purchasing Managers Index data pointed to a fragile but encouraging recovery in global manufacturing, raising hopes that the worst is over. Asia, Japan's Nikkei .N225 rose 1.2% to its highest since late February and markets in Seoul .KS11 , Taipei .TWII , Hong Kong .HSI and China .SS also gained as the central bank there also provided another shot of stimulus. optimistic read for risk can only persist if measures like orders and employment continue to improve month to month," said Alan Ruskin, chief international strategist at Deutsche Bank (DE:DBKGn).

"Early setbacks would be a very poor sign, but are not expected in the period immediately following the end of lockdowns."

BOIL OVER

The dollar was at multi-month lows against most major currencies following a 5% drop for its main index =USD since March. FRX/

The euro got as high as $1.1160, Britain's pound topped $1.2530 GBP= for the first time in over a month and the Canadian CAD= and Australian dollars AUD= both rose around 0.4% as commodity markets continued their recoveries.

"The protests are part of the reason for the sell-off in the dollar over the last four or five days," said CMC Markets senior analyst Michael Hewson.

"When there are riots on the streets and the president is saying the military will be called in, it adds some near-term uncertainty."

Brent oil LCOc1 rose another 2% to just over $39 a barrel. Traders are expecting major producers to extend output cuts at an OPEC+ meeting later in the week. U.S. crude CLc1 was up 1% at $35.86 a barrel. O/R

Copper prices were at their highest in nearly three months on signs that demand from top metals consumer China was recovering.

Stockpiles CU-STX-SGH dropped at the fastest pace last week since September 2017, data showed. Aluminium producer Rusal 0486.HK said its customers were gradually returning after a major slump in April.

"This is real demand. Domestic investment is booming,especially in infrastructure. Supply and transport slowdowns from South America are also supporting prices," said a copper trader in China.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Global assets

http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar

http://tmsnrt.rs/2egbfVh Emerging markets

http://tmsnrt.rs/2ihRugV MSCI All Country World Index Market Cap

http://tmsnrt.rs/2EmTD6j Asia stock markets

https://tmsnrt.rs/2zpUAr4 What goes down must come up

https://tmsnrt.rs/2MjI9Ti

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional Reporting by Mai Nguyen and Tom Westbrook in Singapore; editing by Larry King, Susan Fenton, William Maclean)

GLOBAL MARKETS-Shares cruise to three-month highs, dollar under protest pressure
 

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