Seven days in the Square Mile

European stock market indices opened sharply lower on Wednesday on uncertainty about the outcome of the US election, later recovering some ground. Investors, who had been factoring in a possible landslide win for Joe Biden, were caught off guard. The outcome will remain unclear for days, and the US could be left with a divided government to tackle the pandemic. That “does not mean we won’t have a fiscal stimulus package”, said Tom McLoughlin of UBS. “But it will be a shadow of what might have happened.” The US Fed is likely to compensate by increasing monetary policy support via more bond purchases and rate cuts – possibly going negative. In Britain, the Bank of England was also expected to act this week to cushion the impact of renewed lockdown restrictions – ramping up bond purchases, or quantitative easing, by another £100bn-£150bn. Analysts predicted that revised GDP forecasts would also reflect the fact that any post-Brexit trade deal is likely to be anything but “comprehensive”. M&S sank to the first loss in its 94-year history as a publicly listed company, registering an £87.6m loss in the halfyear to September; clothing sales were particularly dented by lockdowns. The Anglo-Dutch oil giant Shell said it would raise its dividend – the announcement coincided with a steep fall in the oil price on fears that the resurgent virus would hit fuel demand. LVMH agreed to proceed with its acquisition of Tiffany at a slightly lower price of $15.8bn. Peter Thiel’s controversial data firm, Palantir, is reportedly in talks to provide contact tracing tech to the UK government.