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European stock markets bounce even as COVID-19 cases rise in US

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Diane, a nurse from Houston, Texas, sunbathes at the beach next to her husband, both wearing facemasks, in Miami Beach, Florida on June 16, 2020. New cases rose by 4.6% in Florida over the last 24 hours. Photo: EVA MARIE UZCATEGUI/AFP via Getty Images

European stock markets opened strongly in the green on Friday, despite continued concern globally about the ongoing COVID-19 pandemic.

The FTSE 100 (^FTSE) rose 1% at the open in London, while the DAX (^GDAXI) climbed 0.9% in Frankfurt, and the CAC 40 (^FCHI) in Paris improved by 1%. Gains were broad-based across the continent.

The rise came after a late rally on Wall Street on Thursday that helped stocks close in the green there and buoyed Asian stock markets overnight.

The Nikkei (^N225) closed up 1.1% in Japan, the Shanghai Composite (000001.SS) rose 0.3% and the Shenzen Component (399001.SZ) rose 0.1%.

The Hong Kong Hang Seng (^HSI) index slipped 0.8%. The US senate overnight approved a new law that would “penalize banks doing business with Chinese officials involved in the national security law that China is seeking to impose on Hong Kong,” according to Deutsche Bank strategist Jim Reid.

US futures were pointing to a lower open on Wall Street later today, amid continued concerns about the growth of new COVID-19 cases in the States. The US recorded 39,596 new confirmed cases on Thursday — a new record daily high — and the Texas Governor halted his state’s phased re-opening due to concerns about case growth.

S&P 500 futures (ES=F) were down 0.4%, Dow Jones futures (YM=F) were off 0.7%, and Nasdaq futures (NQ=F) fell 0.3%. All three indexes closed up more than 1% on Thursday.

“There is no doubt that the second coronavirus wave news has been glum and it may maintain this narrative for some time but the fact is that smart money does see the Texas governor’s recent action of halting the further re-open efforts as a positive sign,” said Naeem Aslam, chief market analyst at Avatrade.

“For them, this is the step in the right direction to stamp out the current spike in Covid-19. Measures like this have put an end to the drumbeat of coronavirus news.”