While the easing of lockdown measures around the world has lifted hopes for economies, it also raises the possibility of a fresh wave of infections (Raul ARBOLEDA)

London (AFP) – Hopes for economic recovery as lockdowns ease helped to steady European and US stocks on Tuesday as fears of a second wave of coronavirus infections emerged.

As some of the worst-hit countries — including eurozone members Spain, Italy and France — take heart from slowing COVID-19 death and infection rates, they are gradually allowing businesses to reopen.

European markets ended the day mixed, while Wall Street’s top indices were mostly higher in late morning trading.

“Reopening momentum continues but fear of renewed outbreaks remains high,” said analyst Edward Moya at online currency trading firm Oanda.

Concern about a second coronavirus wave dominated sentiment in Asian trading.

In Wuhan, the central Chinese city where the coronavirus outbreak first emerged, there have been reports of new infections, while South Korea announced its biggest spike in new cases for more than a month.

“A cluster of new cases… serves as a warning that the infection rates could spike again if lockdown measures are eased too quickly,” said Fawad Razaqzada, analyst at ThinkMarkets trading group.

Stock markets in Hong Kong, Sydney, Mumbai, Taipei, Singapore and Jakarta all closed down more than one percent Tuesday.

Tokyo and Shanghai only dipped 0.1 percent however, while there were gains in Wellington and Bangkok.

“While markets may eventually desensitise to mini-cluster outbreaks, provided death statistics remain static… at this stage, it does not lessen fears of a significant secondary spreader, which will undoubtedly weigh on consumer sentiment and hurt the rebound,” said AxiCorp analyst Stephen Innes.

He added that investors would have to expect such uncertainty until a vaccine for the virus is created.

Elsewhere Tuesday, oil prices jumped after Saudi Arabia said it would slash an extra one million barrels per day from its June output.

Kuwait and the United Arab Emirates also announced cuts after the pandemic caused global crude demand to plunge.

After last month’s historic collapse in oil prices to below zero, the commodity has shot higher in recent weeks after top producers already agreed to slash output by a combined 10 million barrels per day.

Stephen Innes, chief global markets strategist at AxiCorp, said traders were also positioning ahead of a data release.

“Besides the excellent optics a Saudi Arabia surprising supply curtailment provides, I do not think anyone wants to be too short ahead of today’s inventory data, especially if it indicates another drop. Hence oil prices finally rally today,” he said in a note to clients.

– Key figures around 1530 GMT –

London – FTSE 100: UP 0.9 percent at 5,994.77 points (close)

Frankfurt – DAX 30: DOWN less than 0.1 percent at 10,819.50 (close)

Paris – CAC 40: DOWN 0.4 percent at 4,472.50 (close)

EURO STOXX 50: UP 0.3 percent at 2,892.22

New York – Dow: UP 0.2 percent at 24,278.40

Tokyo – Nikkei 225: DOWN 0.1 percent at 20,366.48 (close)

Hong Kong – Hang Seng: DOWN 1.5 percent at 24,245.68 (close)

Shanghai – Composite: DOWN 0.1 percent at 2,891.56 (close)

West Texas Intermediate: UP 5.1 percent at $25.36 per barrel

Brent North Sea crude: UP 1.4 percent at $30.03 per barrel

Euro/dollar: UP at $1.0869 from $1.0817 at 2040 GMT

Dollar/yen: DOWN at 107.28 yen from 107.65 yen

Pound/dollar: DOWN at $1.2312 from $1.2337

Euro/pound: UP at 88.26 pence from 87.65 pence

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Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.