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GLOBAL MARKETS-Shares rise on economic recovery hopes, bonds dip

Published 20/06/2020, 12:47 am
© Reuters.
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(Adds U.S. market open; changes byline, dateline; previous LONDON)

* Nasdaq tops 10,000 mark again as Wall Street gains

* Euro rises even as ECB warns of 'dramatic fall'

* Oil gains as OPEC+ pledges to meet supply cuts

By Herbert Lash

NEW YORK, June 19 (Reuters) - Global equity markets shot higher on Friday as renewed optimism of a quick economic recovery spurred risk appetite and reduced demand for safe-haven bonds, as did a report that China will speed up purchases of U.S. farm goods.

The dollar slid and the euro rose even as little progress was made on a 750 billion euro recovery fund at a European Union summit to discuss the stimulus and the European Central Bank chief warned that the region's economy was in a "dramatic fall." in Europe rose almost 1% and Wall Street opened sharply higher, with the Nasdaq surging above the 10,000 mark again, on track to set a record closing high. The tech-heavy index was about 0.3% off its all-time peak.

The U.S. economy is re-opening despite a rising number of COVID-19 cases and some states warning they could re-impose shutdowns, noted Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

"There's a degree of caution and there will be a return to a normal economic environment sooner rather than later, by getting in front of the pandemic," Ghriskey said. "There will be renewed outbreaks and you could see shutdowns again, but it seems like the government is prepared for this second wave."

MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.54% while the pan-European STOXX 600 index .STOXX rose 0.68%. Emerging market stocks rose 0.70%.

On Wall Street, the Dow Jones Industrial Average .DJI rose 139.82 points, or 0.54%, 199.79 points, or 0.77%, to 26,219.92. The S&P 500 .SPX gained 19.08 points, or 0.61%, to 3,134.42 and the Nasdaq Composite .IXIC added 82.37 points, or 0.83%, to 10,025.42.

Investors are tugged in opposite directions by improving economic data and new breakouts of COVID-19 infections, which have caused concerns that the economy may not bounce back as quickly as hoped.

California, North Carolina and a string of U.S. cities have mandated or urged mandatory mask use to contain spiraling coronavirus cases as at least six states set daily records. China reported 32 new coronavirus cases as of the end of June 18, 25 of which were reported in Beijing, China's National Health Commission said. oil rose to above $42 a barrel on Friday, adding to gains in the previous session, after OPEC producers and allies promised to meet supply cuts and signs of recovering demand, hit by the coronavirus crisis. LCOc1 was at $42.73, up 2.94% on the day and U.S. crude CLc1 rose 3.78% to $40.31 per barrel.

ECB President Christine Lagarde called on EU leaders to agree on their recovery plan quickly, diplomatic sources and officials said. The leaders are divided over its final size but hope a deal will be struck in July.

The dollar slipped overnight. The dollar index =USD rose 0.138%, with the euro EUR= down 0.12% to $1.1189 and the Japanese yen JPY= up 0.01% versus the greenback at 106.96 per dollar.

Demand for safe German government debt was little changed, with the benchmark 10-year Bund yield at -0.411% DE10YT=RR .

Benchmark 10-year notes US10YT=RR rose 2.8 basis points to yield 0.7118%.

Spot gold XAU= added 0.9% to $1,737.93 an ounce.

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