London Stocks Soar On Post-Brexit Trade Deal

) this file photo taken on January 5, 2020 shows the flags of the United Kingdom and the European Union. According to a British government source a 'deal is done' on post-Brexit trade. Kenzo TRIBOUILLARD / AFP
) this file photo taken on January 5, 2020 shows the flags of the United Kingdom and the European Union. According to a British government source a ‘deal is done’ on post-Brexit trade.
Kenzo TRIBOUILLARD / AFP

 

London stocks surged Tuesday with investors relieved over Britain’s long-awaited Brexit deal with the EU, while eurozone equities also rose on US stimulus news with Frankfurt extending its record-breaking run.

The British capital’s benchmark FTSE 100 index jumped 2.2 percent in late morning deals, having last traded on Christmas Eve before the announcement of a long-awaited post-Brexit trade deal.

Britain and the European Union finally struck a trade deal Thursday to cushion the economic blow of Brexit, in a major boost to Conservative Prime Minister Boris Johnson.

The pound climbed against the dollar but steadied versus the euro, as dealers continued to digest the 1,246-page agreement document.

“The Brexit deal is really a blessing… for the UK and for the FTSE 100 index. There is no doubt that the FTSE 100 has been a laggard index and now is its time to shine,” AvaTrade analyst Naeem Aslam told AFP.

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He added: “European stocks are still very much in Santa rally mode and traders only want to push stocks higher because they know that there is enough tailwind for the stock market in 2021.”

The EU gave the green light to the deal on Monday, paving the way for it to come into effect in the New Year. Britain’s parliament will seek to ratify it this week.

“Markets seem to be welcoming the Brexit deal,” noted AJ Bell investment director Russ Mould.

“However, the agreement struck between London and Brussels is yet to win universal acclaim — even if that is the inevitable result of the compromises that the Prime Minister had to make to get the deal over the line.”

Elsewhere, Asian markets mostly rose Tuesday following a record-breaking lead from Wall Street, as investors cheered the passage of a huge US stimulus bill which has helped temper fears about surging coronavirus infections.

Investor sentiment was given another shot in the arm after US President Donald Trump signed a $900-billion (735-billion-euro) Covid-19 economic stimulus bill late on Sunday.

“The hunt for records continues,” said Comdirect analyst Andreas Lipkow.

Frankfurt’s DAX index also powered its way Tuesday to new heights, extending its record-breaking run as the market ends a turbulent year on a strong note.

Asia also scored new pinnacles, with Tokyo soaring 2.7 percent to end at a 30-year high.

European nations meanwhile continue to ramp up vaccinations, adding to optimism of a route out of the coronavirus pandemic.

Yet governments around the world have been forced to impose lockdowns and other strict, economically painful measures to contain surging Covid-19 cases.

Trump had meanwhile held off signing the US virus stimulus package for almost a week, saying it did not provide enough cash to Americans and calling for handouts to be jacked up to $2,000 from the $600 offered in the initial bill.

Democrats agreed more was needed and on Monday the House of Representatives approved a motion to increase the payments.

– Key figures around 1150 GMT –

London – FTSE 100: UP 2.2 percent at 6,643.19 points

Frankfurt – DAX 30: UP 0.3 percent at 13,831.72

Paris – CAC 40: UP 0.4 percent at 5,610.83

EURO STOXX 50: UP 0.4 percent at 3,589.57

Tokyo – Nikkei 225: UP 2.7 percent at 27,568.15 (close)

Hong Kong – Hang Seng: UP 1.0 percent at 26,568.49 (close)

Shanghai – Composite: DOWN 0.5 percent at 3,379.04 (close)

New York – Dow: UP 0.7 percent at 30,403.97 (close)

Pound/dollar: UP at $1.3492 from $1.3452 at 2200 GMT

Euro/pound: DOWN at 90.80 pence from 90.81 pence

Euro/dollar: UP at $1.2251 from $1.2216

Dollar/yen: DOWN at 103.65 yen from 103.81 yen

West Texas Intermediate: UP 1.3 percent at $48.26 per barrel

Brent North Sea crude: UP 1.1 percent at $51.50

AFP

Wall Street Stocks Fall As Trump Ends Stimulus Talks

U.S. President Donald Trump removes his mask upon return to the White House from Walter Reed National Military Medical Center on October 05, 2020 in Washington, DC. Trump spent three days hospitalized for coronavirus. Win McNamee/Getty Images/AFP

 

Wall Street stocks dropped Tuesday, falling abruptly after President Donald Trump ended talks on another round of stimulus spending to support the coronavirus-ravaged US economy.

The Dow Jones Industrial Average shed 1.3 percent to close at 27,772.76.

The broad-based S&P 500 fell 1.4 percent to finish the session at 3,360.97, while the tech-rich Nasdaq Composite Index tumbled 1.6 percent to 11,154.60.

After weeks of tortuous negotiations, House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin had appeared to be making progress on another large package that could include funds to boost airline jobs and unemployed workers, among others.

But Trump called off talks until after the election, accusing Democrats of not negotiating in good faith.

“I have instructed my representatives to stop negotiating until after the election,” he wrote in a tweet.

Art Hogan, chief market strategist at National Securities, said investors had become more optimistic in recent days about the odds of a bill given the latest talks between Mnuchin and Pelosi.

“Clearly this is not something that the market is going to favor,” Hogan said. “This has gone from being a tailwind to being a headwind for this market.”

Highflying tech shares were under pressure, with Apple, Amazon and Facebook all down more than two percent.

Airlines were another bruised sector, as any new stimulus measure was expected to include money to keep employees at the carriers on payroll. Delta Air Lines, United Airlines and American Airlines all shed around three percent or more.

Boeing slumped 6.8 percent as it slashed its forecast for medium-term new jet demand due to the coronavirus downturn.

The company projects industry-wide plane sales of 18,350 commercial planes in the next decade, down 11 percent from the 2019 forecast.

 

AFP

European Stock Markets Surge On Vaccine Hopes

 

European stock markets surged Monday on hopes of a coronavirus vaccine, while the dollar waned on continued deadlock over a new US stimulus deal, dealers said.

Looking ahead to a key meeting of central bankers this week, traders sent London’s benchmark rallying 2.0 percent and major eurozone indices were almost 2.5-percent higher approaching the half-way stage.

American authorities on Sunday announced that doctors could use blood plasma from recovered coronavirus patients as a treatment against the disease that has killed more than 176,000 in the US.

The move by the Food and Drug Administration comes as President Donald Trump faces intense pressure to curb the contagion that has hobbled the world’s largest economy and clouded his once-promising prospects for re-election in November.

“European markets have kicked off the week in style, with the FDA’s decision to approve the convalescent plasma coronavirus treatment raising hopes that we could see a vaccine fast-tracked before long,” said Joshua Mahony, senior market analyst at IG trading group.

Hong Kong’s main stock index meanwhile led gains across Asia, rallying 1.7 percent with traders cheered by a pledge from China’s banking regulator that it would continue to back the city as a financial hub after concerns were raised following the imposition of a new security law last month.

Investors will this week be keeping an eye also on a virtual gathering of central bankers at Jackson Hole, Wyoming, for monetary policy guidance after they have already provided already a wall of cash to support the global economy during the pandemic.

The main attraction is a speech by Federal Reserve chief Jerome Powell that is slated to take place on Thursday.

“More clarity will no doubt be sought via this week’s Jackson Hole symposium,” said Ben Emons, of Medley Global Advisors.

Traders are additionally keeping tabs on Washington, where US lawmakers are struggling to reach an agreement on a fresh stimulus package for the American economy.

“Democrats and Republicans are still very far (from) reaching a deal, and this means no further immediate aid in terms of fiscal policy,” said Naeem Aslam, chief market analyst at Avatrade.

“Investors will like to know how the Fed will use language to make politicians understand in Washington about the importance of another stimulus package.”

– Key figures around 1045 GMT –

London – FTSE 100: UP 2.0 percent at 6,118.76 points

Frankfurt – DAX 30: UP 2.4 percent at 13,075.07

Paris – CAC 40: UP 2.3 percent at 5,009.88

EURO STOXX 50: UP 2.3 percent at 3,334.80

Tokyo – Nikkei 225: UP 0.3 percent at 22,985.51 (close)

Hong Kong – Hang Seng: UP 1.7 percent at 25,551.58 (close)

Shanghai – Composite: UP 0.2 percent at 3,385.64 (close)

New York – Dow: UP 0.7 percent at 27,930.33 points (close Friday)

Euro/dollar: UP at $1.1829 from $1.1795 at 2115 GMT on Friday

Dollar/yen: DOWN at 105.72 yen from 105.78 yen

Pound/dollar: UP at $1.3120 from $1.3087

Euro/pound: UP at 90.18 pence from 90.09 pence

Brent North Sea crude: UP 0.7 percent at $44.66 per barrel

West Texas Intermediate: UP 0.6 percent at $42.61 per barrel.

AFP