New York: Further easing of countries´ coronavirus lockdowns pushed equities higher on Tuesday, with optimism stoked by the reopening of bars, cafes, pools and beaches outweighing China-US tensions that hurt the dollar.
“Once again the markets embraced an optimistic outlook… setting aside fears over the long-term economic impact of the pandemic and the ever-growing tensions between the US and China to focus on another round of global easing measures,” said Connor Campbell, analyst at trading group Spreadex.
Adding to the broadly positive outlook was optimism about progress on a possible vaccine, which would allow the shattered global economy to start bouncing back.
But Chris Iggo, at AXA Investment Managers, warned: “That does not mean we should ignore the risk of second waves, prolonged weak growth and geopolitical issues.”
Wall Street stocks surged early Tuesday on optimism about coronavirus vaccines as the New York Stock Exchange resumed physical floor trading for the first time since late March.
About 30 minutes into trading, the Dow Jones Industrial Average was up 2.4 percent at 25,038.94.
The broad-based S&P 500 gained 1.7 percent to 3,007.76, while the tech-rich Nasdaq Composite Index advanced 1.2 percent to 9,434.99.
Analysts pointed to announcements by a number of companies pursuing vaccines for coronavirus, including Merck, which said it would acquire privately-held vaccine company Themis and disclosed new research ventures with other companies.
The gains came after New York Governor Andrew Cuomo, wearing a mask, rang the opening bell to signal the start of the day for traders, also clad in masks and separated by plexiglas.
The NYSE, which closed on March 23 as coronavirus cases were soaring in New York, is ramping up slowly with only a fraction of the normal trading staff. Traders are required to wear masks and have their temperatures taken and must respect social distancing rules.
While many transactions now are executed through computers — enabling the market to function even when physical trade was halted — NYSE leaders say maintaining physical trading facilitates buy and sell orders particularly in the final moments of the day, or during first trades of a new company following an initial public offering.
The floor also has ceremonial benefit for companies to market IPOs and other corporate initiatives.
“US stock markets are gearing up for a strong start to the week as further lockdown easing and some more promising vaccine news lifted sentiment after the bank holiday weekend,” said Craig Erlam, senior market analyst at OANDA Europe.
Key European markets were higher by one percent or more, with London playing catch-up after strong eurozone gains Monday, though its gains were capped by a rising pound.
Earlier, Asian markets had closed higher, with Tokyo rising more than two percent, and Hong Kong up 1.9 percent as city leader Carrie Lam sought to reassure investors, saying fears its business-friendly freedoms were at risk from a planned Chinese national security law were “totally groundless.”
But OANDA´s Erlam warned that whatever good news may be looming on the COVID-19 front stood to be undermined by worsening US-China relations which he said “will be a constant headwind for stock markets”.