A rally in global stocks ran out of steam on Tuesday despite a jump in Chinese factory activity providing a surprise boost for the virus-hit global economy, while oil prices rebounded from 18-year lows.
Asia stocks picked up the baton from a rally on Monday that saw all three of Wall Street’s main indices jump more than three per cent. That carried through to Europe, where gains averaged more than one per cent in midday trading. But as the open of trade approached in New York, European gains stocks bobbed in and out of positive territory.
Meanwhile, Wall Street opened lower, with the Dow giving up 0.5 per cent in the first minutes of trading. The dollar was higher, while the euro came under pressure from data showing inflation in the eurozone fell in March on a slump in energy prices caused by the coronavirus outbreak. “China provided Western investors with a light at the end of the tunnel,” said Connor Campbell, analyst at Spreadex trading group. China’s manufacturing sector saw surprise growth in March, having been mauled in February as the country went into lockdown to tackle the virus. China’s Purchasing Managers’ Index, a key gauge of factory activity, jumped to 52.0 from a record low 35.7 the month before. Anything above 50 is considered growth.
China is slowly returning to a semblance of normal life after months of tough restrictions which locked up millions of people at home and brought economic activity to a near standstill.
