The US equity market finished mixed on Friday amid renewed tensions between the US and China after Beijing announced plans to impose a new security legislation on Hong Kong. The Dow Jones Industrial Average fell 0.04%, the S&P 500 added 0.24%, while the Nasdaq Composite Index rose 0.42%. For the week, Dow added 3.3%, the S&P 500 rose by 3.2% and the Nasdaq Composite gained 3.4%.
Today in Asia, stocks saw mostly positive dynamics. Shares in Hong Kong extended losses initially but turned positive by the end of the session, adding 0.09% after the city was rocked by protests at the weekend. In Japan, Nikkei 225 ended 1.73% higher amid expectations of lifting a state of emergency in Tokyo. Despite the prevailing optimism in the markets, investors remain cautious after the US announced sanctions against a Chinese government institute and eight companies on Friday. In turn, China’s foreign minister said the US was pushing relations between the two to the brink of a new Cold War.
European stock markets opened higher on Monday as investors are looking to countries reopening from pandemic shutdowns. The Stoxx Europe 600 index rose 0.76% while the FTSE MIB Italy gained nearly 1%. Investors shrugged off the German data that confirmed a 2.2% slowdown in growth in the first quarter, pushing the economy into a recession, with DAX 30 adding 1.73%.
Elsewhere, major currency pairs are in a consolidative mode amid thinner trade conditions due to holidays in the U.K. and the U.S. EURUSD dipped to one-week lows around 1.0870 earlier in the day but bounced and turned flat around 1.09. a decisive break above this local resistance is necessary for the pair to extend the recovery. The euro met fresh buying interest after the data showed that German Business Climate improved to 79.5 and Business Expectations improved to 80.1 this month. Should markets retain the upbeat tone, the common currency may extend the pullback from the mentioned lows.