U.S. and European stocks rallied. What about Asian futures?

U.S. and European stocks rallied. What about Asian futures?

U.S. equity futures rebounded on Friday, rallying along with European stocks. Futures on the S&P 500 Index surged forward by 1.6%, while the Stoxx Europe 600 Index soared by 0.8%. Meanwhile, the Asian market traded in the red. The MSCI Asia Pacific Index tumbled down by 1.2%, and the MSCI Emerging Market Index declined by 0.8%.

On Thursday, Wall Street suffered its biggest fall down in twelve weeks. Worries over the second wave of COVID-19 infections, along with a slower-than-expected economic recovery, triggered a dramatic sell-off.

Despite that, contracts on the three main American equity benchmarks pointed to serious gains on Friday. While the Stoxx Europe 600 Index skyrocketed, travel companies, banks, and carmakers gained the most after driving Thursday’s losses. After an earlier decline, WTI crude steadied as well, trading at around $36 a barrel in New York.

What do analysts think about an economic recovery?

The International Monetary Fund stated on Friday that the global economy is recovering more slowly than expected, and it will likely bear lingering scars from the pandemic. 

Furthermore, in some countries, the number of new virus cases is growing. The second wave of infections could significantly hinder recovery. Nonetheless, traders seem to be in a bullish mood again.

Analysts see some positive points – stated Janet Mui, investment director at Brewin Dolphin Holdings Plc in London. She thinks that the worst is over as the economy is gradually re-opening. Still, there are also downside risks. That’s why traders are currently buying a bit of equity, primarily to the U.S. and emerging markets, or ex-Asia.

The U.K. economy lowered by a record of 20.4% in April, according to new data. Still, the pound edged up higher after a report showed Asian equities plunged overnight.

Stock markets rallied frantically after the March lows, partially recovering their losses from the previous months. But pessimistic sentiment about the pace of recovery following months of restrictions and lockdown caused the futures’ plunge last week. Experts fear that the rebound may not last long.

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