Global stocks climb near three-month highs as rebound hopes grow

Investors back belief economic downturn from Covid-19 pandemic has bottomed out

AIB was up 3 per cent, Bank of Ireland was up 3.5 per cent, while Permanent TSB was up 6 per cent. Photograph: Frantzesco Kangaris/Bloomberg

AIB was up 3 per cent, Bank of Ireland was up 3.5 per cent, while Permanent TSB was up 6 per cent. Photograph: Frantzesco Kangaris/Bloomberg

 

World stock markets hovered near three-month highs on Monday, and safe-haven government bonds inched lower as risk appetite grew on signs that the global economic downturn has bottomed out.

Dublin

Euronext Dublin finished Monday up 1.5 per cent, driven mainly by the banking sector on what was a quiet day for the markets due to the bank holiday.

AIB was up 3 per cent, Bank of Ireland was up 3.5 per cent, while Permanent TSB was up 6 per cent, although in the case of the latter only small volumes were traded.

Elsewhere, shares in Ryanair rose 5.5 per cent after chief executive Michael O’Leary suggested over the weekend that he expects to slash fares by half compared to last July and August. Meanwhile, Paddy Power Betfair owner Flutter Entertainment was up 5.5 per cent at close of business.

It was a less successful day on the markets for Kerry Group, which finished the day down 1 per cent, while C&C was flat.

London

London-listed shares ended higher as markets took heart from a scaling-back of coronavirus restrictions, with consumer stocks among the best performers.

Associated British Foods jumped 8 per cent after its fashion brand Primark outlined plans to reopen all 153 of its stores in England on June 15th. The stock was among the best performers on the blue-chip FTSE 100 index, which added about 1.5 per cent for the day.

The domestically sensitive mid-cap index was up 1.4 per cent, propped up by consumer discretionary stocks on hopes that the UK economy would rebound.

Both the blue chip and the mid-cap indexes had ended May on a downbeat note on fears of a strong US response to China’s move to impose a national security law in Hong Kong.

Shares of Standard Chartered and HSBC – banks with substantial operations in Hong Kong – rose about 8.7 per cent and 2.6 per cent respectively.

Europe

European shares rose on Monday, as signs of recovery for the continent’s manufacturers prompted investors to continue snapping up cyclical stocks.

The pan-European Stoxx 600 index finished up 1.1 per cent, holding at its highest level since March 9th even as trading activity was dulled by market holidays for Germany, Switzerland, Denmark and Norway.

Growth-sensitive sectors beaten up by the coronavirus crisis led the gains, with travel and leisure jumping 3 per cent, while banks, miners and oil and gas companies rose between 2 per cent and 2.6 per cent.

Italy’s Mediobanca jumped 8.1 per cent after billionaire Leonardo Del Vecchio confirmed he had asked for the green light from the European Central Bank to increase his stake in the company.

New York

US stocks struggled for direction as investors weighed prospects of a post-pandemic economic recovery against protests across the country over race and an ongoing standoff between Washington and Beijing.

Manufacturing activity eased off an 11-year low in May, an Institute for Supply Management survey showed, the strongest sign yet that the worst of the economic downturn was behind as businesses reopen.

The S&P 500’s 38 per cent rebound since late March has been underpinned by hopes that the global economy would recover from the coronavirus-led downturn as countries start to ease lockdowns.

Target Corp and Walmart closed stores during the unrest that included looting in many cities. Target shares fell 2.1 per cent while Walmart was marginally higher.

At 11.33am eastern time, the Dow Jones Industrial Average was up 8.31 points, or 0.03 per cent, at 25,391.42, the S&P 500 was up 1.61 points, or 0.05 per cent, at 3,045.92. The Nasdaq Composite was up 29.94 points, or 0.32 per cent, at 9,519.82.

Real estate and financials led eight of the 11 major S&P sectors higher.

Pfizer fell 8.5 per cent after the drugmaker said the late-stage trial of its breast cancer drug Ibrance was unlikely to meet the main goal of study.

Gilead Sciences fell 4.3 per cent after its antiviral drug remdesivir had mixed results in a late-stage study of people with moderate Covid-19, as patients given a five-day course of the treatment showed statistically significant improvement, while those given it for 10 days did not.

– Additional reporting: Agencies