By Herbert Lash
NEW YORK (Reuters) - Equity markets rallied globally and the dollar weakened on Tuesday as Chinese trade data defied expectations of a deep downturn as a result of the coronavirus pandemic, igniting hopes that the global economy can march towards recovery, removing the safe-haven allure of the greenback.
Oil prices fell more than 6% as investors doubted that record supply cuts by the Organization of the Petroleum Exporting Countries and other producers would soon balance markets pummeled by the pandemic's blow to demand.
Gold soared nearly 2% and hit its highest price since late 2012 as investors piled in as a hedge against potential inflation and currency debasement resulting from the massive central bank and government stimulus measures around the globe.
Data showed that China's exports fell only 6.6% in March from a year ago, far less than the expected 14% plunge. Imports fell 0.9% compared with expectations for a 9.5% drop.
Stocks rallied around the globe on the Chinese data and signs that sweeping lockdowns to contain the spread of the coronavirus were working. Still, the World Health Organization warned the epidemic had not yet peaked.
Spanish shares (IBEX) gained as much as 1.5% as some businesses reopened, but scrolled back to close up 0.5% as European stocks also pared gains of about the same.
The rally on Wall Street shows investors are not concerned about current results as the corporate earnings season gets under way but are focused on the long-term value of each company's franchise, said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
"Is it an all-clear signal?" said Ghriskey. "No, because I have difficulty in believing the market fully recovers until the timing of the economic recovery is visible, and we just don't know that timing."
Profits at JPMorgan Chase & Co (N:JPM) and Wells Fargo & Co (N:WFC) plunged in the first quarter, as the banks on Tuesday offered the first glimpse of the pandemic's impact on corporate America. Their shares fell -2.9% and -4.5%.
MSCI's All-Country World Index (MIWD00000PUS), which tracks shares across 49 countries, gained 2.37% and its emerging market stock index rose 1.62%.
On Wall Street, the Dow Jones Industrial Average (DJI) rose 502.98 points, or 2.15%, to 23,893.75. The S&P 500 (SPX) gained 79.01 points, or 2.86%, to 2,840.64, and the Nasdaq Composite (IXIC) added 314.17 points, or 3.83%, to 8,506.60.
Chinese shares gained, with the blue-chip index (CSI300) closing up 1.9%. Australian shares (AXJO) rose 1.9%, Japan's Nikkei (N225) 3.1% and Hong Kong's Hang Seng (HSI) 0.6%.
Oil prices remain more than 50% lower this year.
Commitments to cut global output by about 19.5 million barrels a day, including voluntary cuts that will happen gradually in places like the United States, will not be enough to reduce the growing worldwide supply glut, analysts said.
Brent futures (LCOc1) fell $2.14 to settle at $29.60 a barrel while U.S. crude (CLc1) slid $2.30 to settle at $20.11.
The dollar index (=USD) fell 0.496%, with the euro (EUR=) up 0.61% to $1.098. The Japanese yen
Benchmark 10-year notes (US10YT=RR) last fell 1/32 in price to yield 0.7504%.
U.S. gold futures