European shares kick off the new quarter with subdued gains
On Wednesday, European stocks rose at the start of a new quarter as investors monitored the economic data which could signal the extent of a potential economic recovery as countries emerge from lockdown measures. However, the surging coronavirus infections in the United States are likely to delay the global recovery.
The pan-European STOXX 600 index (^STOXX) rose by 0.5% while London’s FTSE 100 (^FTSE) rose by 0.2%.
Germany’s DAX (^GDAXI) climbed by 0.7% after retail sales in the country rose by 13.9% in May.
“The new quarter is starting somewhat mixed in the equity markets, but that should steadily change as investors have likely locked in the gains they wanted for the quarter-end,” Nordea Asset Management’s Senior Macro Strategist Sebastien Galy said.
On Tuesday, the United States recorded its biggest single-day spike since the pandemic began, which means that the global economy would not recover as quickly as some had predicted.
“Q3 begins with news of a record increase in new daily COVID-19 cases in the U.S., and the impressive Q2 performance numbers will be difficult to sustain,” Peel Hunt’s Strategist Ian Williams wrote in a morning note.
“Policy support remains powerful but the shape of the recovery across the major economies is highly uncertain,” he added.