European stock markets opened higher on Wednesday, fueled by gains in energy stocks as well as rising optimism in the UK economy after seeing no coronavirus deaths for the first time since the pandemic began.
The rally followed a positive demand assessment from the Organization of Petroleum Exporting Countries and its allies (OPEC +) and the diminishing prospect of an early return of Iranian barrels.
It comes after the member states of a trans-Pacific trade pact officially agreed on Wednesday that Britain can begin the accession process. The UK officially applied to join the Progressive Trans-Pacific Partnership (CPTPP) in February of this year.
The CPTPP is a trade agreement between 11 countries around the Pacific Ocean.
Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam are part of the trade bloc. The US had planned to join a forerunner of the bloc, but former President Donald Trump pulled out in 2017.
The agreement aims to reduce trade and investment barriers between countries. It removes 95% of customs duties – import taxes – on each other’s goods.
According to the UK government, the UK imported and exported goods and services worth 111 billion pounds (US $ 157 billion) to the region in 2019. Trade in the bloc accounted for 8.5% of all UK exports in 2017. Officials say trade with CPTPP members has been growing at a rate of 8% a year since 2016.
Across the Atlantic, major US stock indices ended up mixed on Tuesday after numbers showed US manufacturing activity rose unexpectedly in May as well
The increase was driven by pent-up demand as the economy reopened, the introduction of COVID vaccines, President Joe Biden’s $ 1.9 trillion (£ 1.4 trillion) stimulus package, and the prospect of an infrastructure boost in Amounting to several trillion in 2021.
The Institute for Supply Management (ISM) said the purchasing managers index (PMI) for factory activity rose last month from 60.7 in April to 61.2, well above the 50 mark that separates expansion from contraction.
Despite the good news, the sector continues to be affected by rising commodity prices, material shortages and labor shortages, ISM said.
Wall Street’s blue-chip S&P 500 (^ GSPC) and the tech-heavy Nasdaq (^ IXIC) ended the session slightly in negative territory, dragged down by technology stocks. The Dow Jones (^ DJI) bucked the trend and closed by 0.1%.
Asian stocks were mixed overnight, with MSCI’s broadest index for Asia-Pacific stocks outside of Japan adding 1.5%.
It comes after the Australian economy resumes its recovery and has grown larger than before COVID for the second straight quarter, aided by its ability to contain coronavirus outbreaks.
Growth, driven by higher demand and household spending, dropped gross domestic product (GDP) in the three months to March, according to the Australian Bureau of Statistics (SECTION).