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World share markets rose on Monday, led by a rebound on Wall Street, even as rising COVID-19 cases threaten to stall the recovery of the world’s largest economy.
Canada’s main stock index gained on Monday as energy stocks were lifted by higher oil prices.
The death toll from COVID-19 surpassed half a million people on Sunday, according to a Reuters tally, a grim milestone for the global pandemic that seems to be resurgent in some countries even as other regions are still grappling with the first wave.
The energy sector climbed 2.9%, helped by gains in oil prices.
At 12:05 p.m. ET, the Toronto Stock Exchange’s S&P/TSX composite index was up 213.08 points, or 1.4%, at 15,402.06.
Domestic data showed that producer prices in Canada rose by 1.2% in May from April on higher prices for meat, fish, and dairy products, as well as energy and petroleum products.
The materials sector, which includes precious and base metals miners and fertilizer companies, added 0.6% as gold prices steadied on Monday, holding close to a near eight-year peak scaled last week.
Financial stocks increased 1.2%, while the industrial and utility sectors rose 1.5% and 2.2%, respectively.
Wall Street’s main indexes rose on Monday following a sharp selloff last week, as investors clung to hopes of a stimulus-backed economic rebound even as coronavirus cases surged, while a jump in Boeing shares boosted the blue-chip Dow.
The planemaker rose 6.4% after the Federal Aviation Administration confirmed on Sunday it had approved key certification test flights for the grounded 737 MAX that could begin as soon as Monday.
A spike in virus infections in Southern and Western states last week spooked U.S. markets, but the threat of a deeper-than-feared recession has led investors to expect that the Federal Reserve or Congress will step in with more stimulus. “The market believes that the Fed has its back,” said Sam Stovall, chief investment strategist at CFRA Research in New York.
“If things get really bad, the Fed will step in with additional monetary easing and basically reach into their bag of tricks to do whatever they need to support the market.”
All 11 major S&P 500 sub-indexes were in the black, with industrial and material stocks leading gains.
The benchmark S&P 500 has rebounded since a coronavirus-driven crash in March, up about 17% since April and set for its best quarter since 1998, as the economy showed signs of a pickup.
Data on Monday showed contracts to buy previously owned homes rebounded by the most on record in May, suggesting the housing market was starting to turn around. Later this week, investors will focus on employment, consumer confidence and manufacturing data for June.
Still, the BlackRock Investment Institute downgraded U.S. equities to “neutral”, citing risks of fading fiscal stimulus, an extended epidemic as well as renewed China-U.S. tensions.
Stovall said some of the choppy trading on Monday was likely down to mutual fund rebalancing their portfolios at the end of the month.
The Dow Jones Industrial Average rose 434.25 points, or 1.74%, to 25,449.8, the S&P 500 gained 31.35 points, or 1.04%, to 3,040.4 and the Nasdaq Composite added 65.72 points, or 0.67%, to 9,822.94.
Coty Inc jumped 8.7% after it said it would buy a 20% stake in reality TV star Kim Kardashian West’s makeup brand KKW for $200 million.
Facebook Inc extended declines from Friday as a report said PepsiCo Inc was set to join a growing number of companies pulling ad dollars from the social media platform.
Oil prices edged higher on Monday, after bullish data from Asia and Europe, but sharp spikes in new coronavirus infections around the world tempered gains.
Brent crude rose 30 cents, or 0.7%, to $41.32 a barrel. U.S. crude rose 44 cents, or 1.1%, to $38.93 a barrel.
The recovery of economic sentiment in the euro zone intensified in June with improvements across all sectors, European Commission data showed on Monday. Overall sentiment rose to 75.7 points in June from 67.5 in May, though still short of expectations.
In China, profits at industrial firms rose for the first time in six months in May, suggesting the country’s economic recovery is gaining traction.
But fears of a second wave of the pandemic are keeping prices from going higher. The death toll from COVID-19 surpassed half a million people on Sunday, according to a Reuters tally.
Reuters.
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