February 4, 2023

Market and Financial News

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Global stocks rise as Beijing eases Covid restrictions

2 min read

Stock markets around the world rose on Monday as a series of positive updates from China including the loosening of some Covid-19 restrictions boosted investors’ confidence.

Wall Street’s benchmark S&P 500 rose 0.8 per cent by mid-afternoon, following solid gains in Europe and Asia earlier in the day.

The technology-dominated Nasdaq Composite added 1 per cent, receiving a further China-related boost after a Wall Street Journal report that Beijing was preparing to lift a ban on ride-hailing app Didi adding new customers.

Didi’s New York-listed shares jumped by more than a third, and the Golden Dragon index of US-listed Chinese companies rose 5.9 per cent.

Chinese state media on Sunday announced that public transport and restaurant dining would reopen in Beijing, sparking hopes of an end to draconian lockdowns that have slowed the world’s second-largest economy and strained global supply chains.

On Monday, a closely watched survey of business activity also suggested that contraction in the country’s services sector had eased in May.

Concerns about the Chinese economy have combined with worries about the impact of rising interest rates and stubbornly high inflation to weigh on stock markets in recent months. The S&P 500 has fallen for eight of the past nine weeks.

“For China to come out of [lockdowns] will make a big difference,” said Neil Birrell, chief investment officer at Premier Miton Investors. “It will also help stimulate global trade.

However, he added that “in my view I don’t think we’ve hit the bottom” of the stock market downturn.

The S&P is down more than 13 per cent this year while the Nasdaq Composite has dropped more than 22 per cent, as inflation hit consumer-facing businesses and spurred the Federal Reserve to signal aggressive rate rises, along with plans to drain liquidity from the financial system via quantitative tightening.

Data on Friday are expected to show that annual US inflation was 8.3 per cent in May, in line…

2022-06-06 14:25:01

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