Tue, 24 Nov 2020

European stocks push higher despite virus surge

News24
21 Nov 2020, 00:13 GMT+10

Global stock markets moved gingerly Friday, Europe picking up on a day of modest gains in Asia with traders weighing coronavirus vaccine hopes against the lack of a US stimulus accord to date.

In midday trading, London's benchmark benchmark FTSE 100 and eurozone big-hitters Frankfurt and Paris all saw their indices rise around half of one percent.

"European markets are gradually gaining ground, with vaccine hopes being counteracted by US stimulus and lockdown fears," said Joshua Mahony, senior market analyst at IG.

"Tentative European gains this morning appear to maintain the ongoing consolidation phase, as markets tread water in the wake of the vaccine boost," Mahony added.

As hopes grow that virus vaccines are only weeks away from approval approval, shares in US giant Pfizer rose almost 2% as the firm and German partner BioNTech prepared to file an emergency request for authorisation to roll theirs out and help defeat a disease which globally has killed almost 1.4 million people and infected almost 57 million.

Given the degree to which the virus has upended the world economy, traders are also closely monitoring the prospects of a US stimulus accord materialising after the president of a regional Federal Reserve bank warned Thursday the United States could see growth contract again in the fourth quarter.

In the aftermath of the presidential election, moves to agree a new stimulus package to support the virus-ravaged US economy remain deadlocked.

Strong British retail sales, showing a sixth straight month of growth, brought come cheer to the market in Britain, still mired in concerns over just what Brexit will bring as the clock ticks down on an accord by year-end.

On the other hand, latest data showed Britain's national debt has risen to its highest share of economic activity since the early 1960s as public sector net debt just surpassed 100 percent of GDP - leading finance minister Rishi Sunak to announce a freeze on public sector pay.

Markets have also been buffeted by fears of where the virus is going as infections and deaths continue to mount and with European governments forced to impose fresh lockdowns.

Major US cities such as New York have also put strict containment measures in place and on Thursday California announced a curfew across the vast majority of the state.

Meanwhile, Tokyo has raised its virus alert to the highest level.

"There's the push-pull of short-term versus long-term and that's what investors are looking at right now," Chris Gaffney, at TIAA Bank, said. "There are some very serious risks in the short term, especially with the lockdowns."

Hong Kong, Shanghai, Seoul, Singapore, Mumbai and Bangkok closed up modestly but Tokyo, Sydney, Wellington, Jakarta and Taipei slipped.

Source: News24

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