Stocks rose in Britain’s biggest listed companies on Tuesday, after prime minister Boris Johnson announced an easing of coronavirus restrictions on shops in England.
A leading European index also hit its highest in almost 11 weeks as an unwinding of curbs on business appeared to be gathering steam across the continent.
Johnson used his daily coronavirus briefing late on Monday to announce outdoor markets and car showrooms can reopen from 1 June if they put appropriate safety measures in place. Other ‘non-essential’ retailers will be able to open from 15 June, unless the outlook worsens on the spread of COVID-19.
The pan-European Stoxx 600 (^STOXX) was up 0.9% to its highest since 10 March on more optimistic sentiment about the global economy, despite fears of a weak recovery and a second wave of COVID-19. Travel and leisure stocks on the index surged 6.2%.
The German government is reported to be planning to lift a current travel warning for other European states from 15 June, and to ease certain social distancing rules earlier than anticipated. It came after the German IFO’s closely watched index showed a better-than-expected rebound in business sentiment, lifting the Dax to its highest since 6 March on Monday.
Meanwhile bars, restaurants and cafes with outdoor seating in Spain opened their doors on Monday.
Leading Asian stock markets had also jumped overnight after Japan ended its state of emergency and China’s central bank indicated it would loosen interest rates.
US stocks looked set to rise too on Friday’s close, with markets shut on Monday for memorial day. S&P 500 futures (ES=F) and Nasdaq futures (NQ=F) were trading 1.8% higher, and Dow Jones futures (YM=F) were up 1.9%.
“The markets reacted like a coiled spring on Tuesday as the loosening of lockdown conditions in the UK and rest of the world, as well as progress on another potential vaccine, raised hopes of a recovery for a global economy which has effectively been on life support,” added Russ Mould, investment director at AJ Bell.
"Any news on reopening of the economy and lack of stories about a second wave are going to be seen as a positive for markets," said Marija Veitmane, senior multi-asset strategist at State Street Global Market, according to Reuters.
"What is interesting is that analysts are increasingly expecting Q2 to be the trough. But I would caution by saying that markets are still very, very fragile."