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Coronavirus: Stocks rise despite global death toll passing 500,000

Tom Belger
Finance and policy reporter
A passenger arrives in Valencia, Spain from Zurich, Switzerland, which has seen rising cases. Photo: Ivan Terron/Europa Press via Getty Images

Leading European stocks closed higher on Monday, as investors remained confident in economic recovery despite the mounting coronavirus death toll worldwide.

Stocks in Britain and France had briefly dropped on the open, following falls in Asia as the number of recorded deaths globally passed 500,000 on Sunday (28 June), according to Reuters analysis.

The number of cases of COVID-19 also edged past 10 million, with alarm over rising new cases in parts of the US, India, Brazil, and Asia.

In Europe, health authorities in Zurich, Switzerland, also announced a 10-day quarantine for almost 300 guests and staff at a nightclub after several people tested positive. In the UK, Leicester in the East Midlands has seen a spike in cases, though nationally infection and death rates are falling.

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Japan’s Nikkei 225 (^N225) fell 2.3% overnight, while Hong Kong’s Hang Seng  (^HSI) index lost 1.2% and China’s Shanghai Composite index (000001.SS) shed 0.6%.

"The increase in US COVID-19 infection rates has dented momentum across markets despite the improvements in the global economy, which continues to beat most data expectations," wrote analysts at JPMorgan in a note.

But the overall death toll worldwide has flattened in recent weeks, and investors remain broadly upbeat about eventual recovery as economies increasingly reopen. In Britain, much of Scotland’s non-essential retail sector and housing market reopened on Monday.

“Death counts are not rising anywhere near the percentages we saw in March and April,” said Stephen Innes, chief global market strategist at AxiCorp.

Britain’s FTSE 100 (^FTSE) closed up 0.6% after prime minister Boris Johnson promised a “Rooseveltian” construction blitz to boost economic recovery. France’s CAC 40 (^FCHI) was up 0.4% and Germany’s DAX (^GDAXI) up 0.5% by late afternoon in Europe.

US stocks continued their stimulus-driven rally from the lows of March, with the Dow Jones (^DJI) up 1.7%, the S&P 500 (^GSPC) up 1% and Nasdaq (^IXIC) up 0.7%.

“Investors now seem to be taking the view that localised flare-ups are going to happen and that they will be quickly contained," said Russ Mould, investment director at AJ Bell.