Stocks climbed on Tuesday, driven by signs of a Chinese manufacturing recovery and the prospect of the novel coronavirus passing its peak in Europe.
- The Chinese government released a purchasing managers’ index reading of 52 for March, up from 35.7 in February.
- Analysts were skeptical of the figure and said it was “incompatible” with past readings.
- The World Health Organization suggested the outbreak in Europe could be stabilizing as growth in new cases slowed.
Stocks jumped on Tuesday as investors cheered evidence of a Chinese manufacturing recovery and signs of progress in combating the novel coronavirus in Europe.
China’s statistics office published a purchasing managers’ index reading of 52 for March a sharp rally from 35.7 in February, a record low as manufacturing output and new orders improved. Areading above 50 indicates expansion, while a figure below 50 suggests contraction.
“For investors this is enough for now because all they wanted to see was a glimmer of hope,” Naeem Aslam, chief market analyst at AvaTrade, said in a morning note.
On Monday, the World Health Organization pointed to signs of stabilization in Europe and expressed hope that outbreaks in Italy and Spain are approaching their peak, Bloomberg reported . Italy reported 4,050 new cases on Monday, its lowest daily tally in nearly two weeks.
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Analysts were suspicious of the sudden resurgence of Chinese manufacturing.
The statistics “stretch the bounds of belief,”Jasper Lawler, head of research at London Capital Group, said in a morning note.
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Other commentators argued the reading can’t be compared to previous ones.
“These PMI surveys asked Chinese firms how they feel now compared to February NOT to how they usually operate,” Michael Every, global strategist at RaboResearch, said in a research note.
“The exercise is therefore incompatible with the normal PMI metric.”
Here’s the market roundup as of 10:40 a.m. in London (5:40 a.m. ET):
European equities jumped, with Germany’s DAX up 2.5%, Britain’s FTSE 100 up 1.8%, and the Euro Stoxx 50 up 2%.
Asian indexes broadly rose, with China’s Shanghai Composite up 0.1% and Hong Kong’s Hang Seng up 1.9%. Japan’s Nikkei fell 0.9%.
US stocks are set to open higher, with futures underlying the Dow Jones Industrial Average and the S&P 500 up 0.7%, and Nasdaq futures up 1.1%.
Oil prices rebounded after slumping to 17-year lows on Monday. West Texas Intermediate rose 6.4% to $21.40, and Brent crude rose 3.4% to $27.30.
The benchmark 10-year Treasury yield dipped below 0.7%.
Gold fell 1.6% to $1,617.
Bitcoin rose about 4% to around $6,500.