U.S. and Asian equities have largely roared back to recover their losses from the peak of the COVID-19 pandemic, spurred by massive federal intervention in the case of the U.S. and effective pandemic control in Asia, leaving their European counterparts mired in the doldrums.

The tech-focused Nasdaq index fell 23.5% from Jan. 1 to a nadir of 6,860.7 on March 23. By May 7, these losses had been recouped, and the index has roared to record high levels, breaching 10,000 points for the first time June 10.

The S&P 500 was down by more than 30% year-to-date March 23 before recovering all of its losses by June 8. The index was off 5.1% year-to-date through June 15 after a down week amid fears of rising numbers of coronavirus cases.

Central banks and governments around the world have been helpless to prevent historic levels of economic decline, but multitrillion-dollar stimulus packages have boosted stocks, reigniting investors' desire for risk.

Growth stocks have led the charge, with the S&P 500 Growth Index up 4.5% year-to-date as of June 15. Information technology has by far the largest weighting in the factor at 39.5%, ahead of consumer discretionary with 14.5%.

"The technology sector has led the way so far this year, and we think this can continue," Stuart Rumble, a multi-asset investment director at Fidelity International, said in an email.

"Many companies and businesses are being forced to explore new ways to conduct their businesses online, ranging from remote working, video conferencing to online shopping and payments. Much of this heightened demand is here to stay," Rumble said.

Asia: Helped by pandemic control

Asian stocks have also largely recovered.

Despite China being the epicenter of the coronavirus, the Shanghai CSI 300 fell less steeply than other global stock indexes, bottoming at 3530.3 on March 23 after having started the year at 4,152.2, a decline of 15%. The index was 3,954.99 by the close of June 15, down just 4.8% from the start of the year.

The more globally focused Japanese Nikkei 225 correlated more closely with U.S. stocks, dropping 30% to 16,552.8 by March 19 before recovering to within 2 percentage points of the Jan. 1 level by June 8.

"The relative outperformance in Asian stocks [in the week ending June 12] highlights the feeling that a potential second wave would be more likely in the U.S. or Europe, with many Asian countries already quite used to adjusting policy to quell any outbreaks," Joshua Mahony, senior market analyst at IG, said in an email.

"The impressive performance for Asia-focused stocks such as Standard Chartered PLC and Burberry Group PLC highlights how many believe the region will be a safer bet for investors compared with the more unpredictable Western markets," Mahoney said.

The South Korean KOSPI has been another relatively strong performer, down just 2.7% year-to-date at the close June 16.

Lagging European stocks

By contrast, the benchmark indexes in Europe and the U.K. have lagged.

The STOXX Europe 600 recovered to within 10% of where it started the year but fell back to almost a 15% deficit in last week's downturn.

"European equities fell even more on the week as the cyclical-over-growth outperformance trade of the past one-two weeks unwound," according to strategist Jim Reid and his team at Deutsche Bank.

Export-dependent German car manufacturers and industrial majors have been hurt by the slowdown in global trade, with German exports contracting 24.0% month over month in April. The DAX 30 was down about 10% year-to-date as of June 15. The French CAC 40 has fared even worse, down 19.4%.

The diminishing prospect of the U.K. and the EU reaching a post-Brexit trade agreement has been a further weight on European equities. Having decided not to extend the transition period for negotiations, the two sides have until December to agree on a deal, a possibility being increasingly downplayed by investors and politicians.

The Brexit uncertainty and large U.K. current account deficit have contributed to the pound weakening 5.2% year-to-date to below $1.26. A weakening pound is typically a positive for the FTSE 100 stocks that generate the bulk of their revenues internationally in dollars. But the oil producers, miners, consumer goods companies and banks have all fallen victim to the economic costs of the coronavirus, leaving the index down 19.6% year-to-date as of June 15.