US Stocks surge with economic hopes

The US equity market finished sharply higher on Wednesday, 27 May 2020, extending the market's gains into a third day, on optimism that economic activity is gathering steam and authorities may offer more stimulus to bolster the recovery. Hopes for potential COVID-19 vaccines under development have also helped propel stocks. At closing bell, the Dow Jones Industrial Average advanced 553.16 points, or 2.2%, to 25,548.27. The S&P 500 - a gauge of US retirement and education savings accounts rose 44.36 points, or 1.5%, to 3,036.13. The tech-heavy Nasdaq Composite Index gained 72.14 points, or 0.8%, to close at 9,412.36.

Market gains continued to receive support from positive signs in the global economy, news of the gradual removal of economic restrictions related to COVID-19, optimism about an eventual COVID-19 vaccine, and signs that Americans are beginning to feel safe enough to travel and congregate in larger groups.

The movements followed up on strong gains in Europe, where authorities proposed a 750 billion euro ($825 billion) recovery fund to help carry the region through the recession caused by the response to the coronavirus pandemic.

On Wednesday, Walt Disney Co announced plans to begin reopening its Walt Disney World resort in Florida, the world's largest theme park, in phases beginning July 11, and MGM Resorts said it would reopen its four Las Vegas casinos on June 4.

Market participants largely shrugged off concerns over U.S.-China tensions, which were heightened by news reports that the White House is considering sanctions against China over Beijing-proposed national security legislation to tighten its control over Hong Kong, as investors focused on efforts to reopen more states for business.

President Donald Trump said Tuesday he plans to make an announcement by the end of the week regarding China's efforts to impose new security laws that would undercut Hong Kong's autonomy. And China's Foreign Ministry said on Wednesday it would strike back at the U.S. if it took any action over the security laws.

Lawmakers in Washington also are pushing ahead with legislation that would require all companies listed on U.S. stock exchanges to submit to audits reviewable by the U.S. Public Company Accounting Oversight Board a move that could force a number of Chinese companies to delist.

Fears about being denied access to American stock exchanges, and their deep wells of funding, may encourage more Chinese companies to consider Hong Kong as an alternative to New York for new listings, despite the geopolitical risks around the financial hub. Online gaming company NetEase Inc. and e-commerce retailer Inc. were pushing forward with plans to sell shares in Hong Kong,

Financial, industrial and health care stocks accounted for a big slice of the gains. Department store chains, which took some of the market's worst losses earlier this year when worries about the recession were peaking, surged amid optimism that life can inch back toward normal.

Among Indian ADR, HDFC Bank rose 8.56% to $40.82, ICICI Bank 7.72% to $8.51, Tata Motors 3.57% to $5.81, Vedanta 0.42% to $4.77, Wipro 5.4% to $3.12, and INFOSYS 3.09% to $9.35, while Dr Reddys Labs fell 0.37% to $50.75.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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