Global stock markets advanced on Monday, driven by an easing of Covid lockdowns in the world’s second-biggest economy China.
London’s stock market, reopening after a British public holiday to mark Queen Elizabeth II’s Platinum Jubilee, shrugged off news that embattled British Prime Minister Boris Johnson was to face a confidence vote from MPs in his own conservative party.
Elsewhere, eurozone stocks also closed higher ahead of a European Central Bank meeting Thursday when the ECB is set to draw a line under its massive bond-buying stimulus program.
On the other side of the Atlantic, Wall Street was firmly in positive territory.
Stocks “have started the week on a positive note buoyed by a strong US jobs report on Friday”, said Victoria Scholar, head of investment at Interactive Investor.
Traders took heart also from a wind-down of Covid containment measures in China that have crippled its economy for months.
With infections trending down in major cities, including Shanghai and Beijing, authorities have allowed some sense of normality to return, raising hopes for a pick-up in consumer activity.
“Positive news around Chinese economic activity and cheaper equity valuations could offer value from a long-term investment perspective, but volatility will remain high in the short-term,” said Diana Mousina, of AMP Capital.
Adding to the upbeat mood were comments from US commerce chief Gina Raimondo that she was considering lifting tariffs on some goods from China to help in the battle against inflation.
In foreign exchange, the British pound was higher heading into the confidence vote on Johnson’s leadership.
“Markets have responded favorably to the news of the contest, with sterling appreciating,” noted Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
“This appears to reflect the general principle that markets favor Conservative governments, and the chances of the Tories winning the next election likely will be higher under a new leader.”
Johnson’s public image has suffered in the past year, most notably over the “Partygate” controversy that saw him become the first serving UK prime minister found to have broken the law.
The Conservative government has come under pressure also from a cost-of-living crisis in Britain as UK inflation stands at the highest level in four decades, driven by surging oil and gas prices.
