European, Asian stocks mostly advance after recovery

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European, Asian stocks mostly advance after recovery

European and Asian stocks mostly advanced Monday after investors tentatively regained some optimism after heavy losses in the financial markets last week on fears that rising interest rates could spark a recession.

London's stock price went up 0.9 percent, with rising crude prices supporting the share prices of energy firms BP and Shell.

Both Tokyo and Shanghai advanced, but Hong Kong nudged lower. The dollar traded mixed.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said a sliver of optimism has broken through on global markets at the beginning of the week.

Europe's investors absorbed the news of record-high eurozone inflation that reinforced expectations of a major European Central Bank interest rate hike in July.

Markets have suffered sharp losses in recent weeks due to fears that global rate hikes aimed at fighting soaring inflation could send economies into a downturn.

As investors nurse wounds from a bruising first half of the year, caution is still the name of the game, Streeter said.

Fawad Razaqzada, City Index analyst, cautioned that global markets might still have more to fall.

Razaqzada told AFP that nothing has changed fundamentally to suggest that the markets have bottomed out.

It is a quiet day with the US out and economic calendar light. So anything we see today should be taken with a pinch of salt. Chris Beauchamp, chief market analyst at online trading platform IG, said investors were also watching US President Joe Biden as some of the punishing tariffs imposed under Donald Trump were about to expire on July 6.

The imposition of tariffs to protect U.S. manufacturers from unfair Chinese trade practices was politically popular.

With US inflation now at 40 year highs, Biden is scrambling to find ways to relieve price pressure and has said that lifting some tariffs is under consideration.

A possible easing of China's tariffs by the US might be the kind of thing that gives equities a much-needed break, said Beauchamp.

President Biden hopes that a rollback of restrictions will give a lifeline to both economies, as well as repair some of the diplomatic fallout from China's pro-Russian stance over the Ukraine war, he added.

In Asia, data showing a flare-up of fresh Covid 19 cases in China revived concerns about the government's policy of locking down towns and cities to fight the disease despite the economic cost.

The jump in new Covid cases weighed on sentiment among investors who were afraid of a return to the painful lockdowns in major cities including Shanghai, which hammered the world's number-two economy.

The euro dollar went up at $1.0431 from $1.0414 Friday.

The euro pound was DOWN at 86.09 pence from 86.10 pence.

Brent crude for the North Sea was up 1.9 percent at $113.78 per barrel.

West Texas Intermediate: UP 1.8 percent at $110.37 per barrel.