European stocks mostly rise as stimulus hope offsets virus woes

LONDON – European stock markets mostly rose today on optimism over US stimulus but London stumbled ahead of the capital's tightened coronavirus restrictions as dealers also tracked post-Brexit trade talks.

Asian equities closed lower as surging Covid-19 infections forced global governments to impose tighter containment measures, trumping optimism over vaccines.

“The market continues to be dominated by the twin narratives of US stimulus and Brexit,” said analyst Chris Beauchamp at trading group IG.

“Despite a miserable session in Asia, where traders fretted over Europe's return to broad lockdown policies, European markets have managed to clock up some decent gains.”

The British pound dropped as Brussels and London continued to pursue extended talks for a long-awaited Brexit trade deal.

“The picture still remains unclear with respect to the future trading relationship between the UK and the EU but seeing as negotiations are still ongoing, that is good enough in traders’ eyes – the door is open for a deal,” said CMC Markets analyst David Madden.

London stocks fell 0.4% at midday with the British capital set to face tighter coronavirus restrictions from midnight.

Added to the gloom, official data showed Britain's unemployment rate rising as the pandemic destroyed a record amount of jobs.

On the upside, Frankfurt added 0.7% and Paris won 0.3% in early afternoon eurozone deals, as US lawmakers inched towards finally agreeing a new stimulus for the world’s top economy.

Sentiment was also boosted after Joe Biden was confirmed as the next US president yesterday, with the Electoral College formalising his victory over Donald Trump, all but extinguishing the incumbent’s efforts to overturn the result of the 2020 election.

While the US yesterday began Covid-19 inoculations, its death toll hit 300,000 and analysts warned that while there is light at the end of the tunnel, there was still a lot of pain ahead.

Soaring case numbers have forced leaders to reimpose measures to stop the disease spreading, with New York City Mayor Bill De Blasio saying a “full shutdown” could be announced soon.

That comes as countries around the world struggle to get a grip on the crisis.

While London faces new tough restrictions as it follows swathes of Britain into the highest tier of containment, the Netherlands was preparing to enter its strictest lockdown since the pandemic began.

Turkey, France and Germany were also imposing tougher measures ahead of the Christmas holiday. – AFP, December 15, 2020