Global stock markets built on strong pre-weekend gains on Monday as optimism that economies are emerging from coronavirus gloom kept buyers onside.
On Wall Street, the Dow index was up just over 200 points at the opening bell, while in Europe London and Frankfurt were both in mildly positive territory, with Paris lagging behind. "Momentum in the global stock market rally is continuing to crush the bears," said Fawad Razaqzada, a market analyst at ThinkMarkets.
"Investors have so far ignored increasing geopolitical risks and a terrible profit outlook," he added.A blockbuster US jobs report on Friday boosted hope that economies were emerging from the COVID-19 slowdown faster than thought as central banks and governments were injecting massive funds into economies.
"The risk appetite remains, especially after last Friday's US non-farm payrolls topped estimates and sparked hopes of a quick recovery in the second half of the year," said Pierre Veyret, analyst at trading group ActivTrades. What selling there was on Monday happened because some investors "chose to take a bit of profit", he said.
As countries continue to ease lockdown measures and with trillions of dollars in stimulus and central bank support pledged, equities have surged since hitting a trough in March.
"While there are still significant uncertainties over the COVID-19 impact on corporate earnings, investors are encouraged by the reopening of economies that is likely to lead to a rebound in profitability later this year," said Iyad Abu Hweij of Allied Investment Partners PJSC.
Crude futures advanced early Monday after OPEC members and other key oil producers agreed Saturday to extend historic output cuts of almost 10 million barrels a day for another month through to the end of July.
But the rally went into reverse following reports that Saudi Arabia would not extend additional, voluntary output reductions that it has been implementing alongside the current production deal beyond the end of this month.