Futures pointed to a strong start for Europe and Wall Street with E-Minis for the S&P 500 up more than 1 per cent helped by forecast beating revenues from Alphabet Inc’s Google.
Eurostoxx 50 futures added 0.4pc while futures for Germany’s Dax index and those for London’s FTSE were each 0.7pc higher.
Risk assets including equities have rallied for most of this month thanks to heavy doses of fiscal and monetary policy stimulus around the globe aimed at softening the economic blow from the Covid-19 pandemic.
Positive news around potential treatments for the infection as well as progress in developing a vaccine have also boosted sentiment recently.
Moreover, investors are growing confident the infection may be peaking as parts of the United States, Europe and Australia gradually ease restrictions while New Zealand this week allowed some businesses to reopen.
Hopes the moves would help revive demand sent US crude futures up about 11pc to $13.66 a barrel, paring a 27pc plunge over the first two days of this week. Brent crude futures rose 3.6pc to $21.20 a barrel.
In equities, MSCI’s broadest index of Asia-Pacific shares outside Japan lifted 0.7pc, having rallied 3.3pc already this week. It hit a high of 471.86 earlier in the day, a level not seen since March 12. Japan’s markets were closed for a public holiday.
Australian shares provisionally closed 1.2pc higher led by energy and resources firms while South Korea added 0.8pc. Chinese markets opened in the black with the blue-chip index up 0.2pc.
All the same, analysts were circumspect about the rally. “The recovery in global share prices from the March lows has not been accompanied by an expansion in market breadth,” said Jefferies analyst Sean Darby.
Darby said the number of stocks above their 260-day moving average was still very low across emerging market and developed market indexes while the number of stocks making new highs versus new lows is about equal.
“Unlike turning points for markets and earnings at the bottom, there is no clear evidence on how the technical picture should evolve. The current rally suggests that conviction levels are low in our view,” Darby added.
The equity gains have come even as analysts predict a sharp contraction in world growth. Moody’s expects economies of the group of 20 advanced nations (G-20) to shrink 5.8pc this year with momentum unlikely to recover to pre-coronavirus levels even in 2021.
Markets were next looking for any guidance from the US Federal Reserve, which is due to issue a policy statement at the close of its two-day meeting on Wednesday. The European Central Bank meets on Thursday.
Analysts said it was unlikely the Fed would make further major policy moves, given the scope and depth of its efforts to counter the economic damage caused by the coronavirus.
On Wall Street overnight, investors dumped tech giants, driving all three major US stock indexes into the red.
The Dow Jones Industrial Average fell 0.3pc, the S&P 500 lost 0.5pc and the tech-heavy Nasdaq Composite dropped 1.4pc.
Investors are now watching out for results from the other major tech firms including Amazon and Apple Earnings from Facebook and Microsoft Corp are due later in the day.
“There was a big sector rotation as money left high value, growth sectors in tech like Amazon and went to value and cyclical sectors like energy, industrial, financials,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
In currencies, the dollar weakened against the Japanese yen to 106.52 on concerns the coronavirus could spread further than previously thought if businesses reopened prematurely.
The euro was up 0.3pc at $1.0852 though the euro index eased after Fitch cut Italy’s credit rating to BBB-, just one notch above “junk” status. The dollar index against a basket of currencies fell 0.2pc.
