PARIS: Global stock markets recovered further on Monday (Jun 4) on easing concerns over political turmoil in Italy and with plans for a US-North Korea summit back on track, analysts said.
The rally was further bolstered by Friday’s forecast-busting US jobs report, with investors cheered by the formation of new governments in Italy and Spain.
“Fears of a trade war between the US and China are doing little to dent market optimism, with European and Asian indices trading in the green,” noted Joshua Mahony, market analyst at IG trading group.
Focus is turning to a Group of Seven (G7) summit in Quebec later in the week, where US President Donald Trump is expected to go head-to-head with other world leaders over trade levies on metal imports.
The EU and Canada have filed complaints at the World Trade Organization, while US Treasury Secretary Steven Mnuchin faced severe criticism at a G7 finance ministers’ gathering at the weekend.
After weeks of market volatility over fears of a trade war, revelations last week that the US created more jobs than expected in May and that unemployment in the world’s biggest economy was at a near five-decade low have energised global stocks.
“US stocks are adding to Friday’s labour report-fuelled rally in early action, with the global markets appearing to find some relief from cooled European political uncertainty and a June summit between North Korea and the US being put back on,” Charles Schwab analysts wrote.
Trump last week said he would meet North Korea’s Kim Jong Un as originally scheduled on Jun 12 for a historic summit, just a week after threatening to consign the entire process to history.
DARK CLOUDS AHEAD?
But Capital Economics analysts warned the markets’ defiance of trade war fears may not last.
“Investors have acclimatised to Donald