Global stocks shrug off fresh virus wave fears, dollar slips

Published 22/06/2020 in Business News, Economy & Finance

Global stocks shrug off fresh virus wave fears, dollar slips

LONDON (Reuters) – World stocks reversed earlier losses and the dollar slid on Monday as investors shrugged off worries that rising coronavirus infections in parts of Europe and the United States over the weekend could scupper a quick economic rebound.

Torn between record stimulus and growing fears of a second wave of infections, stocks .MIWD00000PUS have been moving sideways in recent weeks after rising more than 40% from March lows on hopes the worst of the pandemic was over.

European shares opened lower but nudged into positive territory as a jump in Germany’s coronavirus reproduction rate over the weekend was seen as unlikely to trigger a massive second wave or new lockdowns.

“Markets have climbed back … with stocks proving the doubter wrong yet again as a world of stimulus trumps the reality of economic and health struggles,” said Joshua Mahony, senior market analyst at IG.

Germany’s coronavirus reproduction rate jumped to 2.88 on Sunday from 1.06 on Friday, health authorities said. The spike in infections was mainly related to local outbreaks including in North Rhine-Westphalia.

“I regard the German R statistic as a bit of a red herring or more of a statistical quirk,” said Chris Bailey, Raymond James European strategist.

“Coronavirus at-the-margin remains an overhang but the opening up of Europe still looks on much more solid foundations than the US/Americas.”

The pandemic is accelerating globally with the World Health Organization reporting a record increase in global coronavirus cases on Sunday.

In further evidence that United States was far from returning to normal, Apple (AAPL.O) said on Friday that it would temporarily shut 11 U.S. stores as coronavirus cases rose in some states.

The U.S. dollar meanwhile slipped from two-and-a-half-week highs and stock futures ESc1 were up more than 1% as risk appetite remained alive in a world awash with cheap money.

GRAPHIC: COVID-19 in the United States – .HSI fell 0.5%, underperforming regional markets.

Japan’s Nikkei .N225 fell 0.2% and MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was almost flat.

In currency markets, the euro traded at $1.1214 EUR=, bouncing off three week lows. The yen was flat at 106.92 per dollar JPY=.

The Aussie AUD=D3 was among the biggest risers, benefiting from comments by the head of the country’s central bank that the currency’s recent rise was not a problem and that the impact of the COVID-19 pandemic would not be as bad as first feared.

Oil prices steadied on tighter supplies from major producers, but concerns that the rising coronavirus cases could curb demand checked gains.

Brent crude LCOc1 rose 0.2% to $42.25 a barrel. U.S. crude CLc1 fell slightly to $39.65 a barrel.

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