European Markets Rise as Investors Digest Lockdown Extension.

European Markets Rise as Investors Digest Lockdown Extension.


European stocks rose at the opening bell in London, as investors parsed the news that England’s final lifting of lockdown restrictions would be pushed by four weeks due to Delta variant coronavirus caseloads, and there were positive noises in the jobs market.

 

There has been an outcry from UK businesses across the spectrum since prime minister Boris Johnson announced last night that the final stage of lockdown lifting in England would be delayed by four weeks to 19 July.

 

Nightclubs and bars argued that one week’s notice was not enough to shield the impact on businesses.

 

There was also data from the UK’s labour market, which showed redundancies fell at a record rate to reach pre-pandemic levels.

 

The unemployment rate fell to 4.7% in the three months to April, representing about 1.6 million people, in a modest improvement from 4.8% in the three months to March.

 

The job market is currently bracing ahead of the end of the furlough scheme.

 

The FTSE 100 (^FTSE) was 0.5% higher shortly after the bell. France’s CAC (^FCHI) was trading up 0.6% at the opening bell, and Germany’s DAX (^GDAXI) headed 0.5% higher.

 

“All the dials in the labour market are pointing in the right direction, but they’re heavily distorted by the gravitational pull of the furlough scheme, lockdown lifting bottlenecks, and the effect of annual comparisons now lapping the first wave of the crisis,” said Laith Khalaf, financial analyst at AJ Bell.

 

“We won’t get a clear picture of the health of the post-pandemic economy until the back end of this year, and that means the Bank of England isn’t going to rush to any interest rate hikes in the next few months, even if the UK looks to be firing on all cylinders.”

 

Stocks were bullish in the US on Monday ahead of the Federal Reserve monetary policy meeting — the Nasdaq and S&P 500 indices closed at all-time highs, buoyed by gains from tech giants.

 

US stock futures are up, too. S&P 500 (ES=F) Nasdaq (NQ=F) and Dow (YM=F) futures were all around 0.2% higher at the opening bell in London.

 

Asian stocks were a mixed bag overnight. The Hang Seng (^HSI) and SSE Composite (000001.SS) both closed 0.7% and 0.9% lower respectively, as geopolitical tensions between China and the US upped the ante.

 

Investors are also watching developments following reports of a possible leak at the Taishan Nuclear Power Plant in Guangdong province, near Hong Kong.

 

Meanwhile, Japan’s Nikkei (^N225) was up 1%.

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