European and US stock markets mostly rose Tuesday on optimism over US stimulus and vaccines, but London stumbled ahead of the capital’s tightened coronavirus restrictions as dealers also tracked Brexit trade talks.
“UK-EU trade talks, vaccines, US stimulus talks and politics are all assisting the bullish mood,” said market analyst David Madden at CMC Markets UK.
The British pound rose as Brussels and London continued to pursue extended talks for a long-awaited Brexit trade deal.
“Recent tones out of the EU have highlighted the potential for a breakthrough if the UK and EU are willing to compromise,” Joshua Mahony at IG said.
“However, investors were dealt a fresh dose of reality today after Johnson admitted that a no-deal is the most likely outcome at this point,” he added.
London’s FTSE 100 fell 0.3 percent as a strong pound hurts multinationals which dominate the index and whose earnings are mostly in dollars.
But in the eurozone the Paris CAC 40 nudged higher and in Frankfurt the DAX 30 climbed 1.1 percent as there was good news on the vaccine front.
The European Medicines Agency said on Tuesday it had moved forward a meeting to decide on authorisation for the Pfizer-BioNTech vaccine by more than a week to December 21.
And in the US, a second coronavirus vaccine took a step towards emergency use approval when a FDA briefing document recommended experts give Moderna’s jab a green light when they meet on Wednesday.
Meanwhile Asian equities closed lower as investors focused on surging Covid-19 infections that are forcing many governments to impose tighter containment measures
London faces new tough restrictions as it follows swathes of Britain into the highest tier of containment, the Netherlands was preparing to enter its strictest lockdown since the pandemic began, and New York City could also soon be facing a “full shutdown”.
Meanwhile, Wall Street stocks pushed higher, with the Dow adding 0.5 percent as investors expect lawmakers will finally adopt some stimulus measures.
A group of bipartisan lawmakers has split off contentious elements into separate legislation, raising hopes that a smaller $748 billion package including additional unemployment benefits and rent assistance will win support.
“Optimism is fairly high something will get done since Democrats seem willing to drop state and local aid for now,” said Edward Moya at currency trading platform Oanda.
London – FTSE 100: DOWN 0.3 percent at 6,513.32 points (close)
Frankfurt – DAX 30: UP 1.1 percent at 13,362.87 (close)
Paris – CAC 40: UP less than 0.1 percent at 5,530.31 (close)
EURO STOXX 50: UP 0.6 percent at 3,526.27
New York – Dow: UP 0.5 percent to 30,020.83
Tokyo – Nikkei 225: DOWN 0.2 percent at 26,687.84 (close)
Hong Kong – Hang Seng: DOWN 0.7 percent at 26,207.29 (close)
Shanghai – Composite: DOWN 0.1 percent at 3,367.23 (close)
Pound/dollar: UP at $1.3430 from $1.3324 at 2200 GMT
Euro/pound: DOWN at 90.49 pence from 91.14 pence
Euro/dollar: UP at $1.2156 from $1.2144
Dollar/yen: DOWN at 103.72 yen from 104.05 yen
West Texas Intermediate: UP 1.2 percent at $47.57 per barrel
Brent North Sea crude: UP 1.0 percent at $50.78
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