Europe close: Stocks extend gains despite rising geopolitical tensions
By Alexander Bueso
Date: Thursday 28 May 2020
(Sharecast News) - Stocks in Europe extended their gains on Thursday despite rising geopolitical and diplomatic tensions with Beijing.
The apparent resilience of risk appetite, at least for shares, in the face of that uncertainty was not lost on analysts.
According to IG's Chris Beauchamp, it was "odd" how investors were looking past worsening economic data for the second quarter and mounting diplomatic tensions, with the most likely answer being that markets spied a recovery in the third quarter.
Be that as it may, Beauchamp added: "Such hopes could be dreadfully misplaced however given the long-term hits to activity, employment and spending, and with equities continuing to recover the lost ground of February and March there is precious little room for disappointment."
Against that backdrop, by the end of trading the benchmark Stoxx 600 was 1.64% higher to 355.47, alongside a 1.06% gain for the German Dax to 11,781.13 while the FTSE Mibtel was advancing 2.46% to 18,351.16.
Cineworld and IWG paced gains on the Stoxx 600 in anticipation of the lockdown measures in place in the UK soon being gradually rolled back.
Overnight, the US State Department certified that Hong Kong was no longer autonomous from Beijing, contrary to the handover agreement in place between China and the UK, meaning that Washington might therefore cancel all or some of the privileges enjoyed by the former British colony.
On the economic front, the European Commission's economic confidence gauge for the Eurozone improved from a reading of 64.9 for April to 67.5 in May, but fell shy of the 70.6 print anticipated by the consensus.
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