The US market was closed on Monday for Memorial Day, while the UK market was shut for a Spring Bank holiday. European and Asian markets advanced in thin trading.

European markets

European stocks rose on Monday in thin trading due to holidays in the UK and the US. Gains were driven by Deutsche Lufthans and Bayer, as well as by an upbeat business sentiment survey out of Germany.

The Stoxx Europe 600 index rose 1.1%, while the French CAC 40 index rose 1.5% and the FTSE MIB Italy gained 1%. The German DAX led regional gain, surging 2% on a mix of data and corporate news.

Shares in Bayer surged after Bloomberg reported the company has reached deals with 50,000 to 85,000 U.S. cancer lawsuits connected to its weedkiller Roundup. Deutsche Lufthansa advanced on reports that the struggling German airline was close to a bailout deal.

In economic news, German business sentiment beat forecasts and was stronger than expected for May after a “catastrophic few months,” according to the Ifo institute, as the gradual easing of the lockdown “offers a glimmer of hope” for businesses. Meanwhile, data confirmed a 2.2% slowdown in German first-quarter growth, marking the biggest decline since the financial crisis and pushing the economy into a recession.

Asia Pacific markets

Asian shares traded mostly higher on Monday. South Korea’s Kospi rose 1.2% and Australia’s S&P/ASX 200 gained 2.1%. However, Hong Kong’s Hang Seng Index fell 0.2% after police used tear gas to quell weekend protests over a proposed national security bill for Hong Kong. The Shanghai Composite was flat, while the Shenzhen Composite dipped 0.2%.

Japan’s Nikkei gained 1.7% as the government looked set to end the state of emergency in Tokyo and surrounding areas, raising hopes that the world’s third-largest economy may soon start recovering from recession. Air transport was the best performing sector, with shares in Japan Airlines and ANA Holdings rising strongly. East Japan Railway and West Japan Railway also surged on hopes that the economy would reopen.

Looking forward

On Tuesday, France releases its Business Climate Indicator for May, while Germany announces Gfk Consumer Climate for June. In Hong Kong and New Zealand, merchandise trade data is on tap for April. The US releases consumer confidence data for May and new home sales report for April.

Global stock markets

The Longer-Term Perspective

The table below demonstrates that while we may experience some short-term weakness in markets, the longer-term performance remains encouraging.

Note: all releases are listed in local time.