Stocks rise on hopes of healthy returns
Global indices bounce on better-than-expected data and hopes of an early end to the coronavirus crisis
European investors were in a sunnier mood on Wednesday February 5, after reports hinted that turning points may have been reached in two crucial areas.
Indices in Europe were buoyed by better than expected Purchasing Managers’ Index (PMI) figures. The IHS Markit composite PMI for the eurozone rose to 51.3, from 50.9 in December, beating an earlier flash reading.
IHS Markit chief business economist Chris Williamson said the expansion, driven by the service sector, “adds to evidence that the tide may be turning for the eurozone economy.”
Markets reacted accordingly, with Germany’s DAX registering a 1.48 per cent gain for the day and the pan-European Stoxx 50 climbing by 1.22 per cent.
UK investors also had reason to cheer, with the HS Markit/CIPS UK Services PMI showing a return to solid growth for the dominant service sector. That news helped London’s FTSE 100 end Wednesday with a 0.57 per cent gain.
Traders around the world were also upbeat. Chinese media reported that scientists may have found a coronavirus treatment, raising hopes of an early end to the crisis.
The World Health Organisation (WHO) quickly poured cold water on the news, saying that currently no treatment exists, but traders’ euphoria was not so easily extinguished.
Hong Kong’s Hang Seng index finished the day 0.42 per cent ahead, while Shanghai’s SSEC did better, ending 1.25 per cent higher. US markets also opened strongly, boosted by virus treatment hopes and positive economic data. The tech-focused Nasdaq registered a record intraday high early in the session.
Oil futures, hit in recent days by fears of a slump in global demand, also reflected hopes of an early end to the coronavirus crisis. West Texas Intermediate was trading 3.79 per cent up at 10am EST.
Gold was trading broadly flat at the same time, but Bitcoin was enjoying another strong day. The surging cryptocurrency was worth $9,432 at 3pm GMT, over 3 per cent up on the day.