Stocks bounce as China eases quarantine measures
Stock markets jumped Tuesday and oil prices rallied further as China slashed the quarantine time for visitors, fuelling hopes of recovery for the world's second largest economy.
The news came as Beijing and Shanghai appeared to have contained a Covid outbreak that had forced officials to impose lockdowns that compounded global supply chain snarls, further pushing up inflation.
Authorities said inbound travellers would have to quarantine for only 10 days instead of three weeks.
The news boosted share prices, already striving to rebound from recent sharp losses triggered by fears of a global recession.
"The Covid crisis appears to be rapidly retreating in China," noted Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
"The prospects of rapid recovery for the world's second largest economy is helping lift miners, as metals prices rise in expectation of a surge in demand in the commodity-hungry economy."
At the same time, G7 leaders will condemn China's "distorting" international trade practices in an end-of-summit statement Tuesday, a senior US official said.
"You'll see leaders release a collective statement, which is unprecedented in the context of the G7, acknowledging the harms caused by China's non-transparent, market distorting, industrial directives," the official told reporters.
Traders digested comments also from European Central Bank boss Christine Lagarde, who said the ECB would go "as far as necessary" to fight inflation that is set to remain "undesirably high".
Ben Laidler, a global markets strategist at online trading platform eToro, said current economic weakness had been largely factored in by dealers.
"Much is already discounted by markets, which may be in 'bad news is good news' mode, as a slowdown cools inflation and interest rate fears," he said.
Global equity markets are recovering ground as investors believe central banks could decide to raise interest rates by more modest amounts than previously thought.
The US Federal Reserve and its peers are hiking borrowing costs in an attempt to cool inflation, which has soared around the world to the highest levels in decades.
However, such action has increased the prospect of a global recession, causing economists to think that future rate hikes could be less steep than in recent months.
- Oil jumps as G7 targets Russia -
Oil prices, a major driver of the soaring inflation, jumped around two percent Tuesday on fears of further supply tightening, in addition to prospects for higher Chinese demand.
This comes after G7 leaders agreed to work on a price cap for Russian oil, a US official said Tuesday, as part of efforts to cut the Kremlin's revenues.
International sanctions placed on Russia following its invasion of Ukraine are taking their toll.
Moody's ratings agency has confirmed that Russia defaulted on its foreign debt for the first time in a century, after bond holders did not receive $100 million in interest payments.
- Key figures at around 1030 GMT -
London - FTSE 100: UP 1.2 percent at 7,246.58 points
Frankfurt - DAX: UP 0.8 percent at 13,286.57
Paris - CAC 40: UP 1.2 percent at 6,121.49
EURO STOXX 50: UP 0.9 percent at 3,569.57
Tokyo - Nikkei 225: UP 0.7 percent at 27,049.47 (close)
Hong Kong - Hang Seng Index: UP 0.9 percent at 22,418.97 (close)
Shanghai - Composite: UP 0.9 percent at 3,409.21 (close)
New York - Dow: DOWN 0.2 percent at 31,438.26 (close)
Brent North Sea crude: UP 2.3 percent at $117.74 per barrel
West Texas Intermediate: UP 1.8 percent at $111.55 per barrel
Euro/dollar: UP at $1.0590 from $1.0583 Monday
Pound/dollar: FLAT at $1.2268
Euro/pound: UP at 86.33 pence from 86.24 pence
Dollar/yen: UP at 136.01 yen from 135.48 yen
B.Vidal--ESF
