European stocks extend gains on vaccine

LONDON - Europe’s major stock markets climbed yesterday, extending this week’s bumper gains fuelled by a promising coronavirus vaccine trial and Joe Biden’s US election victory. London stocks gained 0.6 percent heading towards midday, while Frankfurt rose by 0.5% and Paris added 0.6% in early afternoon trade.

Oil prices surged higher on energy demand hopes, while the dollar advanced against the euro and yen. Sterling continued to win support on hopes that Britain and the European Union will strike a post-Brexit trade deal.

Asian bourses finished on a mixed note as investors struggled to maintain momentum, as Donald Trump continued to cast doubt on Biden’s win. Tokyo,

Sydney, Seoul and Taipei all rose more than one percent, but Hong Kong, Shanghai, Singapore and Bangkok fell as traders cashed out.

“Optimism surrounding the potential Covid-19 vaccine is still lifting equity markets, but the bullish sentiment has cooled,” said David Madden, market analyst at trading firm CMC Markets UK.

“Massive gains were racked up in the past two sessions so it is hardly surprising that the buying frenzy has faded.”

Equities roared higher this week after US pharma giant Pfizer and Germany’s BioNTech on Monday revealed that their candidate for a Covid-19 vaccine had been 90% effective, lifting hope for a move towards normality for the planet.

“European equities are on the rise yet again today, with stocks continuing to feel the glow of Monday’s Pfizer-fuelled big bang,” said Joshua Mahony, senior markets analyst at trading group IG.

Observers, however, warned that mass vaccination would take some time -- with billions of people around the world needing the drug while the economy remains in trouble and the disease continues its rampage.

Health experts also warned that the Pfizer/BioNTech data still needed reviewing.

Market focus was also firmly on the US election.

“While the Biden bounce may have provided a significant degree of upside for stocks, Trump’s refusal to concede does provide some risk for this current bullish sentiment,” cautioned analyst Mahony.

The president has refused to concede the election to Biden and has vowed to mount legal challenges, saying without evidence that there was massive electoral fraud, sparking more uncertainty for investors over a planned US stimulus package. - Nampa/AFP