Stocks and oil up as China eases quarantine rules

LONDON, June 28 (Reuters) – Global stocks rose on Tuesday as oil prices firmed following China’s decision to ease some quarantine requirements for international arrivals, raising hopes stronger growth and a recovery in demand for raw materials.

China has halved quarantine time for inbound travelers in a major easing of one of the world’s toughest COVID-19 restrictions, which has deterred cross-border travel and driven international flights to just 2% of pre-pandemic levels. Read more

Asian stocks rose after the announcement and European stocks were firmly in the green, sending the MSCI benchmark for global stocks (.MIWD00000PUS) into positive territory and on track for its fourth gain consecutive daily.

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China’s strict zero-COVID regulations have dampened activity in the world’s second-largest economy, but an easing of travel restrictions and the reopening of major cities after lockdowns are bolstering optimism that growth can be put back on track. rails.

“It’s a good step forward,” said Hani Redha, multi-asset portfolio manager at PineBridge Investments.

“It’s not enough to lead to a very robust recovery, but it’s definitely going to be positive gradually.”

MSCI’s broadest index of Asia-Pacific stocks (.MIAP00000PUS) rose 0.4%, while the Hong Kong Hang Seng (.HSI) reversed earlier losses to gain 0.9% and l he Chinese CSI 300 index (.CSI300) closed up more than 1%. Chinese tourism stocks (.CSI930633) gained more than 5.5%.

The pan-European STOXX 600 (.STOXX) rose 0.7% to a two-week high, boosted by oil and gas (.SXEP) and mining (.SXPP) stocks as commodity prices took advantage of hopes a resurgent demand from the main metal consumers. China.

US stock index futures were higher with S&P 500 e-minis up around 0.5%, but the outlook for developed market stocks remains challenging as central banks try to balance inflation stubbornly high with slow growth.

“Equity markets won’t be off the hook until central banks adopt a less hawkish stance,” said Salman Baig, portfolio manager, multi-asset solutions, at Unigestion.

“Unfortunately for many investors, such a pivot will likely only occur after the economy has slowed enough to put inflation back on a sustainably lower path.”

The European Central Bank’s Central Banking Forum in Sintra continued on Tuesday with ECB President Christine Lagarde stating her intention to start raising interest rates from next month.

Lagarde said the ECB will act gradually when it starts raising rates, but with the option to act decisively on any deterioration in inflation over the medium term, especially if there are signs of unanchoring. inflation expectations. Read more

Eurozone government bond yields rose after Lagarde’s comments as investors remained focused on inflation risks and monetary tightening, the 10-year yield of Germany, the bloc’s benchmark, in up 11 basis points to 1.658%.

The euro was little changed against the dollar after Lagarde’s initial comments, while China’s offshore yuan rose 0.1% after Beijing’s moves to ease travel restrictions.

The dollar index, which measures the greenback against a basket of six currencies, was little changed at 103.99.

Oil prices rose after China eased quarantine rules, with the focus already on tight supplies as G7 leaders agreed to study price caps on oil and gas imports Russian gases. Read more

U.S. crude rose 1.9% to $111.65 a barrel. Brent crude jumped 2.3% to $117.73 a barrel.

“A tight supply news seam supported the (oil) market,” analysts at Commonwealth Bank of Australia said. “Political unrest could reduce supply to a few second-tier producers, Ecuador and Libya. And then there’s the G7’s proposed price cap for Russian oil.”

Gold was up 0.1%, with the spot price trading at $1,824 an ounce.

Bitcoin rose 1.4%, trading at $20,989 after falling to $17,588.88 earlier this month.

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Reporting by Samuel Indyk in London and Julie Zhu in Hong Kong; Editing by Jacqueline Wong, William Maclean

Our standards: The Thomson Reuters Trust Principles.

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