Markets mostly firmer on US stimulus package hopes
OPTIMISM that US lawmakers will eventually pass a new stimulus package lifted most global markets on Monday, with the White House ramping up its offer and President Donald Trump insisting Republicans want to get a deal done.
Frankfurt and Paris advanced after a strong session in most of Asia, but gains were capped by rising global coronavirus infection numbers.
London flatlined as investors awaited news of fresh coronavirus restrictions for specific areas in England.
“European bourses are heading out of the blocks in a mixed fashion,” noted City Index analyst Fiona Cincotta.
“Rising Covid-19 cases, both in the UK and on the continent, plus Brexit concerns coming to a head, could keep the lid on any upwards movement.”
Roller-coaster ride
There was another strong lead before the weekend on Wall Street, with hopes for a fresh injection of cash into the world’s top economy overshadowing a surge in virus infections that have forced some governments to re-impose containment measures and targeted lockdowns.
Investors were sent on a roller-coaster ride last week when Trump first called off talks before doing a volte-face to say they were back on and were progressing well.
On Friday, Trump jacked up his of fer, proposing a $1.8 trillion package and say ing he favoured an even larger package.
The move has instilled optimism that an agreement can be reached, even though the White House plan is $400 billion short of the one put forward by the Democrats.
With Joe Biden well ahead in opinion polls, analysts say traders are increasingly betting he will win next month’s election comfortably – avoiding the uncertainty of a Trump challenge to the result – and
Democrats will take houses of Congress.
Fresh wave of infections
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Hong Kong and Shanghai led Asian markets higher, both piling on more than t wo per cent with support a lso coming from hopes Chinese President Xi Jinping will use a speech i n Shenzhen later this week to announce a further opening up of China’s economy.
Sydney, Seoul, Singapore, Jakarta and Wellington also enjoyed healthy gains but Tokyo ended down.
On t he corporate f ront, shares in airline group I AG sank about one per cent in London after the group announced the shock departure of British Air ways CEO Alex Cruz.
Faced with the global travel crisis, IAG stock has plummeted by a staggering 75 per cent since the start of the year – making it the worst performer listed on London’s FTSE 100 index.