Stock Markets Fuelled by Vaccine & Stimulus Optimism

London, Dec 4 (AFP/APP): Investors pushed stock markets higher Friday on continued optimism over vaccines and signs of progress on a new US stimulus, though surging infections and deaths highlighted the painful reality of the coronavirus crisis.

In foreign exchange, the pound held its own even as European doubts over a post-Brexit trade deal with Britain boiled over. France has threatened a veto as intense negotiations entered what could be their final hours. The dollar gained against the euro and yen even though US jobs data showed the world’s biggest economy added just 245,000 new jobs in November, far fewer than analysts had expected.

“The soft employment report though is seen as a positive for stocks since it ought to incentivise Congress to pass a stimulus bill this year,” said Neil Wilson, chief market analyst at Markets.com.

Brent crude oil briefly reached its highest level since March, close to $50 a barrel, after OPEC and its oil-producing allies struck a deal on Thursday to offer flexibility over changes to production in the coming months. But “obvious divisions between members of the group mean the question marks over the future direction of oil supply are as large as ever,” said Caroline Bain, chief commodities economist at Capital Economics.

Meanwhile “there’s plenty of enthusiasm around at the moment, whether that be vaccine results or stimulus talks on Capitol Hill,” noted Oanda market analyst Craig Erlam. “For the first time this year, things are looking up and that optimism can be felt throughout these markets.”

While the consensus is that next year the world can begin returning to normal as people are inoculated, observers warn that lockdowns and other containment measures currently in place are crippling businesses and jobs. The United States recorded more than 210,000 new cases in a 24-hour stretch to Thursday evening, and more than 2,900 deaths, according to Johns Hopkins University. Italy registered 993 deaths, an all-time high.

The figures reinforce the need for governments to maintain restrictions that hobble economic activity. Attention also focused on Washington as US lawmakers appeared to be inching towards an agreement on more stimulus before the Christmas break. Democratic leaders have backed a $908-billion bipartisan proposal as a starting point for discussions and some top Republicans are warming to the idea. Wall Street stocks rose modestly in early trading Friday, with the Dow Jones Industrial Average up 0.4 percent.

Key figures around 1710 GMT

  • London – FTSE 100: UP 0.9 percent at 6,550.23 points (close)
  • Frankfurt – DAX 30: UP 0.4 percent at 13,298.96 (close)
  • Paris – CAC 40: UP 0.6 percent at 5,609.15 (close)
  • EURO STOXX 50: UP 0.6 percent at 3,539.27
  • New York – Dow: UP 0.6 percent at 30,153.13
  • Tokyo – Nikkei 225: DOWN 0.2 percent at 26,751.24 (close)
  • Hong Kong – Hang Seng: UP 0.4 percent at 26,835.92 (close)
  • Shanghai – Composite: UP 0.1 percent at 3,444.58 (close)
  • Euro/dollar: DOWN at $1.2144 from $1.2147 at 2150 GMT
  • Pound/dollar: UP at $1.3488 from $1.3453
  • Dollar/yen: UP at 104.13 yen from 103.84 yen
  • Euro/pound: DOWN at 90.04 pence from 90.28 pence
  • West Texas Intermediate: UP 0.4 percent at $46.05 per barrel
  • Brent North Sea crude: UP 0.4 percent at $49.08 per barrel

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