Stock markets around the world rose on Monday as a series of positive updates from China, including the influx of some restrictions on the Covid-19, boosted investor confidence.
The Wall Street benchmark S&P 500 rose 1.5% after strong gains in Europe and Asia earlier in the day, but gave up some of the gains in the afternoon’s trading, closing 0.3%. as rising Treasury yields put further pressure on stocks.
The technology-dominated Nasdaq Composite added 0.4 percent, receiving a new boost from China after a report in the Wall Street Journal that Beijing was preparing to lift the ban on Didi car transport to add new customers.
Shares of Didi listed in New York rose more than 20 percent, and the Golden Dragon index of Chinese companies listed in the United States rose 5.4 percent.
Chinese state media announced on Sunday that public transportation and restaurants would reopen in Beijing, raising hopes of ending draconian blockades that have slowed the world’s second-largest economy and have global supply chains.
On Monday, a close-up survey of business activity also suggested a contraction in the country’s services sector had slowed in May.
Concerns about the Chinese economy have been compounded by concerns about the impact of rising interest rates and stubbornly high inflation that stock markets have weighed on stock markets in recent months. The S&P 500 has fallen for eight of the past nine weeks.
“For China to come out [lockdowns] it will make a big difference, “said Neil Birrell, chief investment officer of Premier Miton Investors.” It will also help stimulate global trade.
However, he added that “in my opinion I do not think we have hit bottom” of the stock market crash.
The S&P has fallen more than 13 percent this year, while the Nasdaq Composite has fallen more than 22 percent as inflation hit consumer-oriented businesses and prompted the Federal Reserve to point to aggressive rises in type, along with plans to drain financial liquidity. system by means of a quantitative adjustment.
Friday’s data is expected to show that annual inflation in the US was 8.3% in May, in line with the previous month’s reading. Sustained inflation combined with a strong employment report released in the U.S. last week suggested that “the Fed will continue to act” by raising interest rates, Birrell said.
The Fed’s main interest rate stands at 0.75%, and money markets are forecast to rise to 2.8% by the end of the year. U.S. government bonds came under pressure on Monday, with the yield on the 10-year Treasury bill rising 0.09 percentage points to rise again above the closely observed 3% threshold. Yields increase as prices rise.
In Europe, the Stoxx 600 regional stock index rose 0.9 percent, but remained nearly 9 percent lower so far due to the economic impact of Ukraine’s invasion of Ukraine. Russia and rising consumer prices. The German Xetra Dax gained 1.3%.
In foreign exchange markets, the pound gained 0.3 percent against the dollar to just over $ 1.25, ahead of UK Prime Minister Boris Johnson, who survived a strong Monday vote of censure on his leadership.
The euro fell 0.3% to just under $ 1.07 ahead of this week’s European Central Bank meeting. The bank is expected to secure a plan to raise its main deposit, currently 0.5% less, by a quarter of a point in July and return to the positive costs of the eurozone loan in September.
In Asia, mainland China’s CSI 300 share index rose 1.9% and Hong Kong’s Hang Seng rose 2.7%.