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European stocks rose to kick off the week on Monday, with investors looking to countries reopening from pandemic shutdowns. But trade was thinner trade given holidays in the U.K. and the U.S.
The Stoxx Europe 600 index SXXP, +0.91% rose 0.6% to 342.36, after gaining 3.6% last week. That marked the best weekly return since the week ended April 9. The French CAC 40 index PX1, +1.25% gained 0.9% and the FTSE MIB Italy I945, +1.14% gained 0.8%. U.K. markets will remain closed Monday for a Spring Bank holiday.
The German DAX DAX, +1.91% jumped 1.4%, shaking off data that confirmed a 2.2% slowdown in growth in the first quarter, marking the biggest decline since the financial crisis and pushing the economy into a recession.
Investors are keeping an eye on mounting tensions between the U.S. and China and rising Hong Kong unrest, but remain “somewhat optimistic regarding the reopening of businesses across the globe and hope for more monetary and fiscal stimulus,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note to clients.
Hong Kong police fired water cannons and tear gas at protesters in a popular shopping district on Sunday, as thousands mounted street protests against China’s plan to move to push for national security legislation on the city. Signs of fresh tensions in the region are adding to frictions that have been building between the U.S. and China over the coronavirus pandemic.
House national security adviser Robert O’Brien said Sunday that the U.S. will likely sanction China if that legislation goes through. For its part, China has cautioned over strained relations between the two countries.
“We need to be alert to efforts by some political forces in America to hijack China-US relations and who try to push the two countries toward a so-called ‘new Cold War’,” said China’s foreign minister Wang Yi in comments on Sunday, according to reports in the South China Morning Post and elsewhere.
In Europe, investors were cheered by news that major European countries are slowly reopening from shutdowns. Churches in France reopened for Sunday Mass for the first time in two months, while Spain said it would reopen for international tourists from July and Germany and Italy are also slowly reopening its economy.
In the U.K., Prime Minister Boris Johnson has come under fire for standing by chief aide Dominic Cummings, who drove 250 miles from London to Durham to his parents house while infected with coronavirus.
Drug stocks were on the move Monday, with shares of heavily-weighed Bayer AG BAYN, +7.02% gaining 4.5% after Bloomberg reported the company has reached deals with 50,000 to 85,000 lawsuits claiming its weedkiller Roundup was carcinogenic. Those sources cited said none of the deals have been signed yet.
Shares of Novo Nordisk AS NOVO.B, -1.18% were down 1.6%, while auto maker BMW AG BMW, -0.75% fell nearly 2%.
Business software group SAP SE SAP, +2.49% SAP, -0.10% was among the heavyweight gainers, up 1.6%.
U.S. stock futures YM00, +0.97% traded higher, though Wall Street will remained closed on Monday for the Memorial Day holiday.
