World stocks race toward second-best week on record
Iseq index among top performers in Europe
Stock markets bounced after US president Donald Trump laid out plans to gradually reopen the US economy. Photograph: AP Photo/Alex Brandon
Global stocks rallied on Friday on US president Donald Trump’s plans to revive the coronavirus-hit US economy and hopes of a potential drug to treat Covid-19, while the dollar fell amid a growing risk-on sentiment among investors.
The bulls charged ahead on reports that patients with severe COVID-19 symptoms had responded positively to Gilead Sciences’ experimental drug, remdesivir, lifting its shares 8.3 per cent.
Boeing’s announcement it would resume production of commercial jets next week also buoyed sentiment and gave traders a reason to shrug off a 6.8 per cent decline in Chinese gross domestic product, the first contraction since 1992 when modern record-keeping began.
The dollar slid against the euro and Japanese yen and gold fell as much as 2 per cent as investors globally drew comfort from Trump’s plans to gradually re-open the US economy in a staggered, three-stage approach.
“It’s too early to signal the all-clear, but I do think we’re making progress,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
Economies will not fully recover until people are comfortable they can move about in public without being exposed to the coronavirus and getting sick, he said. In addition, laid-off workers must be rehired but there is a silver lining in that at least half indicate their situation is temporary, he said.
The pan-European STOXX 600 index rose 2.38 per cent and is up nearly 8 per cent over the last two weeks. Among European indices, the Iseq was one of the top performers, rising 3.83 per cent.
On Wall Street, stocks pared earlier gains but remained firmly in positive territory.
Meanwhile, credit rating firm S&P Global downgraded another clutch of countries hit by the coronavirus and warned that even triple-A and other top-rated nations could be cut depending on how they manage the longer-term consequences of the pandemic.
In Europe, Italy’s government bonds, which have been under pressure as the country’s virus difficulties push its debt-to-GDP ratio towards 150 per cent, rallied again. – Reuters