Market Flash: Optimism Lifts Markets

Equity markets started the week in a particularly positive mood as more economic stimulus plans emerged. The European Commission raised its package from €500bn to 750bn. However, the trend was mostly driven by hopes for a genuine economic rebound as countries started to exit lockdown and fears of a second wave abated. Europe’s GDP will probably contract by close to 10% this year and company results could only return to 2019 levels in 2022 but the worst hit sectors bounced on a recovery in industrial production and consumer demand after 2 months of lockdown.