Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

GLOBAL MARKETS-Stocks gain as China cuts tariffs, investors look beyond virus

Published 06/02/2020, 08:15 pm
Updated 06/02/2020, 08:21 pm
© Reuters.  GLOBAL MARKETS-Stocks gain as China cuts tariffs, investors look beyond virus
EUR/USD
-
USD/JPY
-
UK100
-
US500
-
FCHI
-
DE40
-
USD/CNY
-
CRDI
-
HG
-
LCO
-
ESU24
-
IXIC
-
DE10YT=RR
-
US10YT=X
-
STOXX
-
MIAPJ0000PUS
-
CSI300
-
MIWD00000PUS
-
DXY
-

* European shares touch record high

* MSCI world index up 0.5%

* China will cut some U.S. import tariffs by half

* Record Wall Street highs lift mood

* Safe-havens sold off

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

(Releads, adds European markets, economist comment)

By Tom Wilson and Hideyuki Sano

LONDON/TOKYO, Feb 6 (Reuters) - Stock markets across the world gained on Thursday, helped by record highs on Wall Street and a move by China to halve tariffs on some U.S. goods as investors bet that the global economy would avoid long-term damage from the coronavirus.

Momentum from Wall Street spilled from Asia into European markets, gathering pace as investors assessed prospects for help to the global economy in the form of government stimulus and looser policy from central banks.

Europe's STOXX 600 .STOXX index gained 0.4% to a record high, with a swathe of strong earnings reports helping. Indexes in Frankfurt .GDAXI , Paris .FCHI and London .FTSE all made solid gains, rising between 0.3% and 0.7%.

Italy's biggest bank UniCredit CRDI.MI rose 5% after it posted a lower-than-expected fourth-quarter net loss. said on Thursday it would halve tariffs on some U.S. goods, which could help improve negotiating conditions for a second phase of a trade accord after the two countries signed off on an interim deal last month. move, which came after China's central bank eased policy last weekend, helped MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS jumped 1.6%. Bluechip Chinese shares gained 1.9% .CSI300 .

U.S. stock futures ESc1 rose 0.5%, while the MSCI world equity index .MIWD00000PUS , which tracks shares in 49 countries, gained 0.5%.

Markets were already beginning to emerge from safe-haven assets and bet on the virus being a short-term shock, even while the human toll continues to grow.

"The market is looking through the near-term disruption to activity and seeing potential for quite a sharp rebound later this year on the back of even looser policy," said Tim Drayson, head of economics at Legal & General Investment Management.

Evidence of appetite for riskier bets was apparent in currencies, where China's onshore yuan CNY=CFXS climbed 0.2% to its strongest level since Jan. 23 after the tariff cuts were announced. The Australian dollar AUD=D3 also gained.

The Japanese yen, considered a safe haven, slipped to a two-week low against the dollar JPY= .

Bond yields also rose. The 10-year U.S. Treasuries yield climbed to 1.672% US10YT=RR from a five-month low touched on Friday. Euro zone bond yields told a similar story, with German bund yields DE10YT=RR climbing to their highest in almost two weeks. SLUMP"?

Another 73 people on the Chinese mainland died on Wednesday from the virus, the highest daily increase so far, bringing the total death toll to 563, the country's health authority said on Thursday. from China indicate that about 2% of people infected with the new virus have died, suggesting it may be deadlier than seasonal flu but less deadly than SARS, another reason that investors remain relatively calm. also cited vague rumours of a possible vaccine for the coronavirus as a trigger for Wednesday's stock rally, even though the World Health Organization has played down media reports of "breakthrough" drugs. coronavirus is continuing to spread so we need to remain cautious. But markets now appear to think that there will be a quick economic recovery after a short-term slump," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.

On Wall Street, the S&P 500 .SPX and Nasdaq .IXIC had both reached record highs after jobs and service sector indicators suggested the economy could continue to grow this year even as consumer spending slows. major currencies were largely quiet. The euro stood flat at $1.0996 EUR= , while the dollar against a basket of six major currencies .DXY slipped a fraction to 98.262.

Oil futures rose for a second day amid investor optimism over unconfirmed reports of possible advances in combating the coronavirus outbreak in China, which could cause fuel demand to rebound in the world's biggest oil importer.

Brent LCOC1 rose by 66 cents, or 1.2%, to $55.97 a barrel by 0842 GMT, having risen 2.4% in the last session.

Still, it is down about 15% so far this year.

Copper, considered a good gauge on the health of the global economy because of its wide industrial use, showed some signs of stabilisation although it remained depressed overall.

Shanghai copper SCFc1 extended its rebound into the third day, rising 1.4% from 33-month low hit earlier this week.

For Reuters Live Markets blog on European and UK stock markets, please click on: LIVE/

https://tmsnrt.rs/2Rgj92F

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.