Stocks rise despite US-China jitters; outdoor markets open in England – business live (2024)

Global stocks have enjoyed a good start to the week, building on the gains of the past month, amid relief that tensions between the US and China haven’t worsened. The US president said on Friday night he would end preferential treatment for Hong Kong in trade and travel in retaliation for Beijing’s new security law for the former British colony -- but stopped short of outlining immediate measures.

China has reportedly asked state-owned firms to halt purchases of soybeans and pork from the US, but so far markets have shrugged this off.

Optimism was also boosted by final readings for closely-watched manufacturing surveys. They showed declines eased in the US, UK and the eurozone in May after production hit record lows in April because of Covid-19 shutdowns. In China, production unexpectedly returned to growth for the first time since January.

The dollar has weakened as protests spread across the US after the killing of George Floyd in police custody. Gold and silver prices have rallied amid safe-haven buying.

• UK’s FTSE 100 index up 1.2% at 6,148
• France’s CAC up 1.39% at 4,760
• Italy’s FTSE MiB up 1.6% at 18,485
• Dow Jones up 0.15% at 25,421
• Nasdaq up 0.35% at 9,522
• S&P 500 up 0.12% at 3,047

Thank you for reading. We’ll be back tomorrow.

Back to the US, where the more closely watched Institute of Supply Management’s manufacturing PMI for May is out. It’s come in at 43.1 versus 41.5 in April, indicating that while manufacturing is shrinking, the decline has eased slightly.

US stocks have turned positive, with the Nasdaq now up 0.14% and the S&P 500 and Dow Jones flat.

An earlier announcement from the UK’s financial watchdog might spell good news for small businesses.

Several UK insurers have admitted they are liable to pay company owners under business interruption insurance policies after the City regulator challenged them to prove in court that their policies did not apply to the coronavirus pandemic, my colleague Jasper Jolly reports.

The Financial Conduct Authority is seeking court clarification on whether insurers’ policies allow them to refuse business claims related to the coronavirus pandemic. The hearing is scheduled for late July.

The majority of small businesses were not covered for the pandemic, as their policies mainly related to property damage, the regulator believes.

However, after the regulator asked 56 insurers for information on 1 May, an undisclosed number quickly gave in and said they would pay out, after previously insisting they were not liable.

You can read the full story here.

The US manufacturing PMI survey from IHS Markit is out. It recorded 39.8 in May, up from 36.1 in April, signalling the second-biggest decline in production since April 2009.

The decline is similar to those measured over here Markit recorded 39.4 in its eurozone survey, and 40.7 in the UK.

The opening bell has rung on Wall Street and stocks have opened lower.

• Dow Jones down 97 points, or 0.38%, at 25,286
• Nasdaq down 27.5 points, or 0.29%, at 9,462
• S&P 500 down 11.5 points, or 0.38%, at 3,032

Ikea has reopened 19 stores in England and Northern Ireland and large queues formed, for example in Warrington, where are line of more than 1,000 people – physically distanced – filled the car park, and at Wembley in London.

Restaurants in Soho in central London are asking for temporary pedestrianisation of areas around them so they can offer alfresco dining with physical distancing once they are allowed to reopen in July, my colleagues Sarah Butler and Ed Cumming report. In Liverpool, some areas will also be semi-pedestrianised to help welcome outdoor diners.

The UK is taking inspiration form Lithuania’s capital, Vilnius, which has announced plans to turn the city into a vast open-air cafe and San Francisco, where restaurants are being encouraged to take over parking bays, pavements and streets.

My colleague Joanna Partridge reports from Norwich:

After eleven weeks closed, Norwich’s outdoor market is reawakening, with traders arranging their goods outside their stalls and customers returning to the city centre.

Markets in England are permitted to reopen from today, provided social distancing rules are followed, and a couple of council enforcement officers patrolled on foot to ensure people were keeping their distance and the one-way system inside the market was being observed.

Trade was steady on the first morning, and stall owners selling goods deemed non-essential such as clothing and fresh flowers were keen to get back to business. The market is one of the oldest and largest in England -” it’s lovely to have it back,” said Liz Johnson, out buying fish, fruit and vegetables with her husband Tim, “it’s our first proper day out since mid-March”.

A trickle of shoppers bought fresh flowers at Ponds Flowers stall during the morning- “We’re at the bottom rung of the ladder, building back up,” said Kevin Howes who works on the flower stall.

Time for a round-up of today’s news.

Global stock markets are rallying on relief that there hasn’t been an escalation in tensions between the US and China, and amid further easing of Covid-19 lockdowns. While Donald Trump said he would strip Hong Kong of its special status in response to Beijing’s decision to impose a new controversial security law on the semi-autonomous territory, he didn’t outline any specific measures on Friday night.

A surprise expansion in Chinese manufacturing in May according to the Caixin PMI survey added to the optimism. Hong Kong’s Hang Seng index rallied 3.4% and China’s CSI 300 rose 2.7%.

In London, the FTSE 100 index is 1% ahead at 6,138 while European shares are also up: France’s CAC has gained 1.1% and Italy’s FTSE MiB has added 0.8%. Markets in Germany, Denmark, Switzerland and Norway are closed for the Whitsun holiday.

However, tensions could rise as China has asked its state-owned agricultural firms to halt purchases of soybeans and pork from the US, according to Bloomberg and Reuters, unnamed citing sources. And China’s foreign ministry spokesman said any US attempts to harm Chinese interests would be met with firm countermeasures.

US stock futures were negative, pointing to stock falls on Wall Street when it opens later, but then turned positive.

Declines in the UK and eurozone manufacturing sectors eased in May from April’s record lows, as expected, but economists warned of a “new normal” as global demand was likely to stay weak for some time.

The dollar has weakened to its lowest level since mid-March as protests against police brutality after the killing of an unarmed black man, George Floyd, escalated, with fires burning outside the White House. Sterling hit a three-week high of $1.2425 against the dollar, as lockdown restrictions were relaxed in England, despite high Covid-19 infection and death rates.

Gold and silver prices are rising, amid some safe-haven buying. Spot gold rose as much as 1% and now is 0.36% ahead at $1,732 an ounce. Silver touched a three-month high and is now up 1.5% at $18.10 an ounce.

In corporate news, the budget fashion retailer Primark said it would reopen all its 153 stores in England on 15 June.

Ted Baker, another fashion brand, announced an emergency £105m fundraising to get the business through the coronavirus pandemic. Its founder Ray Kelvin’s 35% shareholding will be diluted after he backed the share sale.

Times are tough for carmakers (and most other companies), although car showrooms are allowed to re-open in England from today. Experts are expecting a brief surge in sales after dealerships were closed for 10 weeks, but warn that this could fade quickly as a firm bounceback in consumer demand looks unlikely.

In France, new car sales plunged 50.3% in May from a year earlier, following an 89% slump in April and a 72% decline in March, new industry figures show. Some 96,310 cars were registered in May.