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Here are the biggest movers

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Bull and Bear are standing in the rain as bronze sculptures in front of the Frankfurt Stock Exchange.

Arne Dedert | picture alliance | Getty Images

The Euro Stoxx 600 on Tuesday closed out its best quarter since March 2015, having climbed 12.59% since the beginning of April.

Even after that rally, the pan-European blue chip index still closed down 13.35% on the year and ended the first half in correction territory, after the global spread of the coronavirus pandemic triggered a historic stock market sell-off between late February and the middle of March.

European stocks have still been outpaced by their U.S. counterparts, with the S&P 500 up 19.95% for the second quarter and down by only 4.04% on the year. However, some analysts are shifting their equity focus from the U.S. to Europe as the world emerges from months of lockdown measures.

Scott Thiel, chief fixed income strategist at BlackRock Investment Institute, told CNBC Tuesday that the investment giant had upgraded European equities from an “underweight” to an “overweight,” in part due to the “upside surprise” in the substantial monetary and fiscal policy response on the continent.

Governments in major economies such as Germany, France and the U.K. have deployed substantial fiscal stimulus measures to mitigate the expected fallout from the pandemic, while the European Central Bank has thus far expanded its bond-buying program to 1.35 trillion euros (around $1.5 trillion).

“What is happening in Germany, the EU Recovery Fund, the ECB’s action, all those things have been very powerful, plus when we look at activity restarting again, we see a region that has dealt with the virus,” Thiel said, adding that despite a severe outbreak initially, major European economies had now set themselves up to reopen.

By contrast, cases continue to escalate in the U.S., where a number of states are now reimposing lockdown measures after record daily spikes in new cases and hospitalizations, with over 2.6 million now infected.

Thiel suggested that investors who have been focused on the U.S. markets, which have long outperformed European counterparts, should look to Europe as an “interesting way of playing the different ways that economies are going to reopen, and the different ways that activity is going to emerge.”

Winners and losers

The stock posting the biggest gain in percentage terms across the second-quarter market rebound was Swedish telecoms and cloud communications platform Sinch, which along with benefiting from the greater requirements for home working, also saw its shares boosted by the acquisition of India’s ACL Mobile in mid-June. Sinch closed the second quarter up 103% and is up more than 178% for the year.

Slightly behind with an 88% rise over the second quarter is compatriot mobile living manufacturer Dometic Group, which is still down more than 11% year-to-date.

Meanwhile, British miniature wargames manufacturer Games Workshop surged 85% in the second quarter, recovering March’s losses to finish the half up 31%. The company upgraded its profit outlook on June 12 and said the recovery was “going better than expected.”

At the other end of the European blue chip index, Spain’s Banco de Sabadell plunged 34% in the second quarter and is down more than 70% for the year, while French corporate bank Natixis posted a second-quarter fall of 21.6% and is down 41% for the year.

Belgian insurer Ageas, banking giant HSBC and British airplane engine manufacturer Rolls-Royce all finished the quarter down more than 16%, and have fallen 40%, 36% and 58% respectively so far this year.

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Modi’s Weibo account removed at request of Indian embassy in China

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Indian Prime Minister Narendra Modi (L) talks to Chinese President Xi Jingping during the BRICS meeting in Goa, India, on October 16, 2016.

Prakash Singh | AFP | Getty Images

China’s Twitter like service, Weibo, has removed Indian Prime Minister Narendra Modi’s account at the request of the Indian embassy in Beijing. 

The unusual move comes amid rising tensions between India and China over their disputed border high in the Western Himalayas and a clash earlier this month that left 20 Indian soldiers dead

India retaliated by banning 59 Chinese apps, including high-profile ones such as TikTok and WeChat. New Delhi is also reportedly weighing whether to let Chinese telecommunications giant Huawei participate in the rollout of the country’s next-generation 5G mobile networks. 

Weibo announced late on Wednesday that it had received a request from the Indian embassy in China to close Modi’s account.

“Weibo received an application from the Indian embassy in China, which said: ‘(I) hope to have the official Weibo account of Prime Minister Narendra Modi removed from the platform,'” it said.

The Chinese microblogging platform complied with the request and announced that: “Weibo has closed what was certified as the account of the Prime Minister of India.”

The Indian embassy in Beijing was not immediately available for comment when contacted by CNBC.

Modi has been on Weibo since 2015 but posted quite infrequently. 

His first ever post was written in Chinese and translated as: “Hello China! Looking forward to interacting with Chinese friends through Weibo.” 

Because social media platforms like Facebook and Twitter are effectively blocked in China, Weibo is a major way to communicate with a Chinese audience. 

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UK extends visa rights to Hong Kongers, offers path to citizenship

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In this photo taken in Hong Kong on June 3, 2020, Reese Tan, a 25-year old tutor, poses with his British National (Overseas), or BN(O), in his favorite part of the city and the place he would miss the most if he leaves, the bustling shopping and eating district of Mongkok.

Anthony Wallace | AFP | Getty Images

The U.K. is offering around 3 million Hong Kong residents a path to British citizenship after a new national security law was imposed in the city, Foreign Secretary Dominic Raab said on Wednesday.

That announcement came after Beijing passed and implemented a new national security law in Hong Kong. Raab called the move “grave and deeply disturbing.”

“The enactment and imposition of this national security law constitute a clear and serious breach of the Sino-British Joint Declaration,” U.K. Prime Minister Boris Johnson told Parliament on Wednesday.

The Sino-British Joint Declaration signed by then Chinese Premier Zhao Ziyang and British Prime Minister Margaret Thatcher guarantees Hong Kong’s autonomy under the “one country, two systems” framework. The city was a British colony for over 150 years before being transferred back to China in 1997.

The new national security law is spurring concerns about excessive oversight from Beijing and eroding rights and freedoms in Hong Kong.

About 3 million Hong Kongers are eligible for British National (Overseas) passports. There were 357,156 BN(O) passport holders as of April 17.

The new measures extend the visa rights of BN(O) passport holders, allowing them to stay in the U.K. for five years with the ability to work or study. That’s far greater than the six months previously allowed.

After five years, the passport holders will be able to apply for settled status and citizenship, according to information on the U.K. government website.

“This is a special, bespoke, set of arrangements developed for the unique circumstances we face and in light of our historic commitment to the people of Hong Kong,” said Raab in Parliament.

“We want a positive relationship with China. But, we will not look the other way on Hong Kong, and we will not duck our historic responsibilities to its people,” he added.

The U.S. and Taiwan are also looking into helping those who want to leave Hong Kong.

In the U.S., a bipartisan bill known as the “Hong Kong Safe Harbor Act” would grant Hong Kongers priority refugee status. Introduced in both chambers of Congress this week, the bill would enable those who fear political persecution from China to more quickly leave the city.

Taiwan on Wednesday set up an office to help resettle fleeing Hong Kongers.

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Pakistan central bank governor on economic challenges during coronavirus pandemic

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The coronavirus pandemic is a public health crisis and until it’s addressed, there will most likely be economic hardships ahead, Pakistan’s central bank governor told CNBC. 

Pakistan has reported more than 213,000 cases of infection and nearly 4,400 people have died.

“We are very concerned. First and foremost, this is a public health crisis — we have to remind ourselves of that,” Reza Baqir said on CNBC’s “Street Signs Asia” on Wednesday.

“And, only on a secondary basis, then it becomes an economic crisis. Until the public health crisis is addressed, we should continue to expect challenges on the economic front,” he added. 

For countries like Pakistan, the trade-off between lives and livelihood is a very real trade-off.

Reza Baqir

Pakistan’s central bank governor

Prime Minister Imran Khan’s government lifted a two-month-long lockdown in early May, a few weeks before an important festival. 

As millions were struggling with starvation during that time of drastically reduced economic activity, the country’s Covid-19 cases surged once the lockdown was eased, Reuters reported

Lockdowns are a ‘luxury’

At the moment, the government is targeting coronavirus hotspots in the country and locking those areas down. 

Baqir explained that prolonged national lockdowns are a “luxury of the rich.” 

“For countries like Pakistan, the trade-off between lives and livelihood is a very real trade-off,” he said. The country has many day laborers who earn daily wages and lockdown would abruptly cut off their source of income. Without having a savings pool to dip into, many of those people would be looking at starvation, according to Baqir. 

Policemen put barbed wire as an market area is sealed by the authorities in Rawalpindi on July 1, 2020, as COVID-19 coronavirus cases continue to rise.

Farooq Naeem | AFP | Getty Images

Pakistan has limited fiscal policy options to help the economy weather the coronavirus crisis. Considering the country’s relatively large public debt, excessive government spending to boost the economy will be difficult.

On the monetary policy side, Baqir said the central bank injected so far about $7 billion, or 2.5% of GDP, in terms of liquidity support to households and businesses.

The central bank last week slashed its monetary policy rate by 100 basis points to 7% — State Bank of Pakistan has cut interest rates by 625 basis points since March when the coronavirus infection began spreading through the country. Baqir told CNBC the move was in tandem with the fall in inflation, from above 14% in January to around 8% currently. 

“There is no doubt that we face grave challenges,” Baqir said.

He outlined the three considerations in Pakistan’s response to the crisis. 

First, he highlighted that before the virus struck, the country’s economic fundamentals was improving – such as bringing down its current account deficit, which was a core part of its economic problems. Second, its fiscal and monetary policies are “prudent,” and finally, Pakistan is working with international financial organizations like the IMF and World Bank to keep its economy afloat. 

“I think the smart lockdown strategy of locking down hot spots in cities so far is working reasonably well, and we are confident that with the combination of measures – for us on the economic side, we should come out of this crisis largely unscathed,” Baqir said. 

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