Global shares rose on Tuesday, thereby recovering from Monday’s losses despite concerns revolving around China’s tightening approach to Covid after a surge in the nation’s virus cases. The stock market rise largely indicates that investors are expressing a risk appetite that outweighs Covid concerns.
The MSCI All-World index of shares increased 0.2%, putting on track to a second straight month of gains, while Japan’s Nikkei rose 0.6%. Several commodities also experienced gains on Tuesday, with spot gold breaking four days of losses with a 0.2% rise to $1,741.40 an ounce. Brent crude futures recovered from a 6% loss on Monday by gaining 1.4% to $88.64 a barrel.
In contrast, the U.S. dollar has weakened after reaching a 10-day high on Monday. The currency lost 0.2% following investor concerns over China’s spike in Covid cases while also faring poorly against the strengthening British pound and Japanese yen.
Analysts at National Australia Bank expressed little surprise in the decline of the U.S. dollar, expressing doubts over whether demand for the currency would sustain. “Evidence U.S. inflation has peaked and can fall significantly in 2023, together with China and Europe developments, convince us a USD depreciation cycle is now in train.”
