By Peter Nurse
Investing.com - European stock markets pushed higher Tuesday, amid optimism over a post-coronavirus economic recovery, with the German market outperforming as it returns after a three-day weekend amid talk of a fresh government stimulus package.
At 4:10 AM ET (0810 GMT), the DAX in Germany traded 3.1% higher, France's CAC 40 rose 1.7%, while the U.K.'s FTSE index was up 0.7%. The pan-Europe Stoxx 600 index gained 1.3%, hitting its highest level since March 9.
Earlier Tuesday, Australia’s central bank kept its interest rate and yield objectives unchanged amid early signs of a recovery. “It is possible that the depth of the downturn will be less than earlier expected,” Reserve Bank of Australia Governor Philip Lowe said in a statement.
Signs of economic recovery are overshadowing continued civil unrest in the U.S., with President Donald Trump threatening on Monday to use force to quell the ongoing protests in dozens of U.S. cities over the death of George Floyd.
Additionally, Sino-U.S. tensions remain strained, with China ordering state-owned firms to halt purchases of U.S. soybeans and pork in retaliation for President Donald Trump's announcement that he would end special treatment for Hong Kong.
In corporate news Tuesday, Lufthansa (DE:LHAG) surged 7% as its supervisory board approved a 9 billion euro ($10 billion) government bailout for the airline. The bailout faces legal challenges from the likes of Ryanair on antitrust grounds.
Volkswagen (DE:VOWG_p), Daimler (DE:DAIGn) and Bayerische Motoren Werke (DE:BMWG) all gained over 5% on a Reuters report that the country's Ministry of Economics had proposed a 5 billion euro buyer bonus scheme to boost car sales. The scheme may be discussed later as part of a cabinet meeting on a new stimulus package, according to German media.
Elsewhere, Norway's Seadrill (OL:SDRL), which only re-emerged from bankruptcy two years ago, slid 9.3% as it announced it has written down the value of its oil drilling rigs by $1.2 billion and hired bankers and lawyers to evaluate a financial restructuring that could allow the company to reduce its $7.4 billion debt.
Oil prices edged higher Tuesday, with traders expecting the Organization of the Petroleum Exporting Countries and its allies, a grouping known as OPEC+, to bring forward its next meeting to later this week in order to discuss whether to extend record production cuts beyond end-June.
The American Petroleum Institute will issue its measure of U.S. oil inventories after the bell. Last week the API reported that crude stockpiles climbed by 8.7 million barrels, bucking the recent downward trend.
At 4:10 AM ET, U.S. crude futures traded 0.8% higher at $35.73 a barrel. The international benchmark Brent contract rose 1.2% to $38.77.
Elsewhere, gold futures fell 0.3% to $1,745.15/oz, while EUR/USD traded at 1.1135, flat on the day.