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World stocks power ahead on rapid recovery hopes

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A trader wearing a face covering works on the trading floor of the New York Stock Exchange in New York, the United States, on May 26, 2020. (Colin Ziemer/NYSE/Handout via Xinhua)

AFP – Global stocks powered higher yesterday as strong US retail sales data bolstered confidence in the economic recovery, even as China further tightened restrictions to try to limit a fresh Coronavirus outbreak in Beijing.

Major indices in Europe and the United States gained following a surprisingly big rebound in retail sales in May, which came after an April marred by widespread Coronavirus shutdowns.

Analysts also pointed to a boost from positive results from a clinical trial on the steroid dexamethasone as a treatment for Coronavirus, as well as to reports that US President Donald Trump was considering a $1 trillion infrastructure investment package.

“As with the blowout government jobs report, this retail sales beat is one of the most bullish economic surprises ever and, while the weak industrial production report could warn of a more sluggish recovery in the manufacturing sector, the outlook for the US economy is still bright,” said Gorilla Trades strategist Ken Berman.

The Dow Jones Industrial Average ended up 2 percent, gaining around 525 points, to close at 26,289.98.

Earlier, bourses in Frankfurt, London and Paris all rose by around 3 percent, while Asian stock markets also rebounded after suffering big losses on Monday.

Tokyo’s main stocks index was boosted by the latest Bank of Japan (BoJ) move to ramp up aid for firms struggling with virus fallout.

The BoJ expanded its zero-interest loan programme to firms to 90 trillion yen ($837 billion) from 55 trillion yen.

Its total war-chest for companies amounts to 110 trillion yen when corporate bond purchases are taken into account.

The BoJ also made no change to its ultra-loose monetary policy framework.

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