European stocks steady amid Biden stimulus doubts

LONDON: European stock markets steadied yesterday amid doubts over the passage of US President-elect Joe Biden’s flagship stimulus policy. Nearing the half-way mark, London’s benchmark FTSE 100 index was down 0.3 precent, Paris flatlined and Frankfurt added 0.2 percent.

Asia mostly closed lower following a recent rally, though Hong Kong and Shanghai rose on data showing China’s economy expanded a forecastbeating 2.3 percent last year.

While the reading was the weakest in four decades, it showed growth was picking up again after a devastating start to 2020 as swathes of the country were shut down to contain the deadly coronavirus.

The dollar traded mixed, Bitcoin held steady and oil prices declined, while most US markets were shut for Martin Luther King Jr. Day. Focus is turning to Biden’s inauguration tomorrow and hopes that his massive spending plan can get through Congress.

Stimulus concerns

“European markets have stumbled into a new week, with Biden’s stimulus promises doing little to help sentiment given doubts over just how much of that package will be approved in Congress,” said Joshua Mahony, senior market analyst at online traders IG. “With the US markets closed for Martin Luther King day, today provides a gentle entry into a week that will be dominated by the US.

“While US trading activity will minimized today, speculation over whether Biden will be able to garner enough support to pass his full stimulus package remain a key concern for markets,” Mahony added.

While broadly welcomed on trading floors, Biden’s $1.9 trillion stimulus proposal was unable to fuel fresh gains with the spending spree largely priced in. Concern about a frightening spike in new virus cases was also keeping a lid on buying sentiment as governments are forced to impose fresh lockdowns while battling to roll out vaccines. —AFP