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Stocks rally in Europe, US trading closed for holiday

2 years 8 months 3 weeks ago Monday, September 07 2020 Sep 7, 2020 September 07, 2020 1:39 PM September 07, 2020 in News
Source: Associated Press

BEIJING (AP) — European stocks rallied on Monday after a mixed close in Asia, while Wall Street remained closed for Labor Day after turning in its biggest weekly decline in more than two months.

Investors have been encouraged by hopes for a coronavirus vaccine and central bank infusions of cash into struggling economies. But forecasters warn the rise in prices might be outrunning uncertain economic activity as case numbers rise in the United States and some other countries. Some are re-imposing anti-disease controls that disrupt business.

“The question now is whether there will be a sustained unwinding in this frothy market, or if conviction about fresh central bank liquidity and fear of missing out kicks in once again,” analysts at Mizuho Bank said in a report.

One possible sign the decline might be temporary: demand for government bonds and other assets considered safe havens in an extended down market “has not come flooding back in,” the analysts said.

In Europe, the FTSE 100 in London rose 2.4% to close at 5,937.40 and Frankfurt’s DAX added 2% to 13,100.28 after industrial production figures showed a third consecutive monthly increase. The CAC 40 in Paris rose 1.8% to 5,053.72.

U.S. trading in stocks was due to remain shut for the holiday. On Friday, the S&P 500 slid 0.8%. The Dow lost 0.6% and the tech-heavy Nasdaq dropped 1.3%.

In Asia, the Shanghai Composite Index lost 1.8% to 3,292.59 after Chinese customs data showed August export growth accelerated to 9.5% over a year earlier while imports edged lower.

Shares in China’s most advanced semiconductor manufacturer, SMIC, fell 22.9% in Hong Kong following news that Washington is considering limiting its access to U.S. manufacturing technology. The company has denied suggestions it assists China’s military development.

The Nikkei 225 in Tokyo shed 0.5% to 23,089.95 while the Hang Seng in Hong Kong lost 0.4% to 24,589.65.

The Kospi in Seoul advanced 0.7% to 2,384.42 while Sydney’s S&P-ASX 200 shed 0.3% to 5,944.80.

Wall Street’s slide on Friday followed a Labor Department report that showed U.S. hiring slowed to 1.4 million last month. That was fewest jobs added since the economy started bouncing back from the initial shock of the pandemic. The United States has recovered about half the 22 million jobs lost to the pandemic.

In energy markets, benchmark U.S. crude oil for October delivery fell 70 cents to $39.07 per barrel in electronic trading on the New York Mercantile Exchange. The contract lost $1.60 to $39.77 on Friday. Brent crude for November delivery, the international standard, declined 67 cents to $41.99 per barrel in London. It shed $1.41 the previous session to $42.66.

The dollar edged up to 106.31 yen from 106.21 yen on Friday. The euro fell to $1.1818 from $1.1852.

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