Tuesday, May 26, 2020

Asia Times: Stocks start the week on a positive note as investors weigh in on easing lockdown restrictions

  • China
  • Dollar
  • Gold
  • Euro
  • Pound
  • Stocks
  • Oil


Market Recap: Stocks start the week on a positive note as investors weigh in on easing lockdown restrictions

Stocks in Europe and Asia rose on Monday to recover from the sharp selloff last Friday while the US and London Stock Exchanges were closed for a public holiday. Stocks in the EU were higher likely mostly due to the reopening of multiple economies in the bloc. Improving sentiment in Germany likely also helped drive the German Dax and Euro Stoxx higher on Monday. The business sentiment and economic expectations indices in Germany for May released on Monday came in better-than-expected, signalling that the easing of lockdown restrictions in the country has likely helped optimism for business owners. Asia gained as well, but the focus of the week is likely to remain on Hong Kong as tensions between China and the US continue to rise.

In company news, Lufthansa's shares surged 7.5% after the German government approved a 9bn euro aid package for the airline. Airbus gained 8.5% as well, as the outlook for the airline industry starts to somewhat recover with airlines set to resume flights soon. The industry is still expected to face a slow recovery however, as social distancing rules remain a key issue for flight capacity.

Indexes Daily Change (%) Net Change Closing Price
Euro Stoxx +2.27% +65.88 2,905.47
Dax +2.87% +317.41 11,391.28
Nikkei +1.73% +353.49 20,741.65
KOSPI +1.24% +24.47 1,994.60
ASX200 +2.16% +118.56 5,615.59
*Source: Bloomberg

Sterling led gains among major currencies against the dollar after Bloomberg reported that British government officials were working on plans to reopen parts of the country from June 1st. Trading was relatively thin in the foreign exchange market on Monday as multiple countries were closed for public holidays.

The greenback was mixed against major currencies on Monday however, as investors weigh on escalating tension between the US and China. China's foreign ministry spokesman, Zhao Lijian, spoke to reporters on Monday, urging the US to withdraw the relevant decisions, likely referring to the US' decision to expand its entities list restricting access to American technology to include an additional 33 Chinese companies.


Gold along with the Japanese yen declined on Monday, likely as more countries start to ease lockdown restrictions. The US Treasury market remained closed for the Memorial Day holiday in the US.

Safe Haven Assets Daily Change (%) Net Change Closing Price
Gold -0.16% -2.73 1,731.95
Silver +0.43% +0.07 16.85
JPY -0.07% -0.07 107.71
*Source: Bloomberg

Brent crude oil futures rose on Monday after International Energy Agency (IEA) Executive Director Fatih Birol expressed his view that oil demand has more room to recover. Birol suggested in an interview that oil demand may be able to reach levels back before the onset of the Covid-19 pandemic, in the absence of strong government policies (referring to climate-change policies), a sustained economic recovery and low oil prices. Birol's view on improving oil demand likely helped drive speculation that oil prices may experience more upside as the global economy starts to show more improvement.

Oil Futures Daily Change (%) Net Change Closing Price
Brent Crude +1.14% +0.40 35.53
*Source: Bloomberg

Stocks in Asia looks set for gains on Tuesday with Japan's Nikkei rising more than 1% on Tuesday morning likely thanks to Japanese Prime Minister Shinzo Abe ending its nationwide state of emergency in Japan on Monday. Abe's comments to during a news conference on Monday that the Japanese government will be deciding on a second extra budget on Wednesday to help businesses and individuals affected by the Covid-19 pandemic likely helped spur gains in the Nikkei as well. Futures tracking major US indices were trading more than 1% higher on Tuesday morning as well, signaling that US stocks are likely to track gains in the European stock market on Monday when it reopens, assuming downside risks do not arise before the end of Tuesday.

Asia Daily Change (%) Net Change Last Price As of (GMT +8)
Nikkei Index +1.39% +288.98 21,028.84 8:42:10 AM
KOSPI Index +0.89% +17.81 2,012.17 9:02:10 AM
ASX200 Index +1.01% +56.81 5,667.30 9:01:45 AM
*Source: Bloomberg
US Futures Daily Change (%) Net Change Last Price As of (GMT +8)
Dow Futures +1.13% +277.00 24,700.00 8:52:22 AM
S&P500 Futures +1.19% +35.00 2,988.00 8:52:22 AM
Nasdaq Futures +1.30% +122.00 9,527.75 8:52:22 AM
*Source: Bloomberg

Economic releases for the day ahead include (all timings in GMT +8):

  • Germany Jun Consumer Confidence (Gfk) (2pm)
  • US May Consumer Confidence (Conf. Board) (10pm)