London -Stock markets rose on both sides of the Atlantic Monday as hopeful economic data prompted bargain hunting, with some of Asia’s equities markets also making solid gains.

Analysts did not seem entirely confident about the reasons for the rebound as investors appeared to shrug off a wide gap between the White House and Democrats about the next round of relief spending, worsening coronavirus numbers in many parts of the world and festering US-China tension.

Michael Hewson at CMC suggested that “US markets appear to be being propped up by a cohort of the large tech stocks, as well as a resilient pharmaceutical sector, on optimism about a possible vaccine, or vaccines”.

Ipek Ozkardeskaya, at Swissquote, credited better-than-expected Japanese GDP data for the good mood on trading floors, as well as forecast-beating Chinese manufacturing numbers. But volumes were light thanks to the summer holiday season, which probably explained part of the strong market moves.

‘Traders at the beach’

“I suspect a lot of traders are at the beach,” said Stephen Innes at Axicorp, which he said was “the primary reason why its unwise to craft a narrative to rationalise August’s market behaviour”. On Wall Street, the Dow gained just over 100 points at the opening, while key European indices were up by at least 1.5 percent.

Earlier, Japan’s Nikkei 225 had received a boost from data showing the economy contracted less than first thought in January-March.

Shanghai also surged following a forecast-beating reading on factory activity from Caixin, days after an official report pointed to a much improved manufacturing sector.

Meanwhile, a spike in coronavirus infections has forced fresh lockdowns and sparked worries about the impact on the world economy.

“COVID-19 either remains rampant or is making worrying localised comebacks across the world,” said Jeffrey Halley at OANDA. “Although not priced into financial markets yet, it remains the critical risk factor to global recovery.”

A lack of substantial progress by US lawmakers on a new stimulus package has also frustrated traders, while China-US tensions continued as the White House considers measures against Chinese tech firms, citing national security.

Virus concerns and a weak dollar caused by a massive programme of US monetary easing helped haven gold to a new record in Asian deals Monday, topping out at $1,990.84 an ounce.