LONDON – European stock markets slid and the dollar faltered Wednesday following a fairly solid performance in Asia as investors continue to wait on a US stimulus package.
The pound climbed higher meanwhile thanks to hopes that Britain and the European Union will still strike a post-Brexit trade deal despite renewed tensions.
In early New York trading, the Dow Jones index had gained 0.4%.
"European equity markets are in the red... as traders are growing tired of the fact that US politicians have yet to strike a deal with respect to the stimulus package," noted David Madden, analyst at CMC Markets UK.
"The lack of a stimulus scheme combined with growing fears about the health crisis have hurt stocks."
After months of inconclusive talks, Democrats and the White House said they were closing the gap on their stimulus proposals, with House Speaker Nancy Pelosi saying legislation was being drawn up.
Her comments fanned optimism for a much-needed spending boost for US households and businesses, as a fresh wave of coronavirus hits the country and threatens to trigger the reimposition of economically painful containment measures.
The White House has upped its offer by US$80 billion (RM331 billion) to US$1.88 trillion, which is still short of the Democrats' US$2.2 trillion plan, but US President Donald Trump has said he is willing to go higher.
And if nothing is passed before the election, traders broadly expect a new package to be passed at some point, whoever wins in November.
With Joe Biden ahead in polls – while Democrats could possibly win both houses of Congress – there is speculation an even bigger deal could be reached.
In Asia, the Tokyo stock market closed with a gain of 0.3%, while Hong Kong rose 0.8%.
Shanghai's main stocks index dipped after recent gains, however.
Vaccine hopes
Elsewhere, coronavirus vaccine hopes were given a lift after US biotech firm Moderna said its candidate could be given approval for emergency use as early as December.
And a report said drugs giant AstraZeneca might be allowed to restart trials in the US after they were suspended worldwide in September when a volunteer fell ill.
The firm has already revived tests in Britain and elsewhere.
The disease has flared up again across the United States and Europe, where many countries have been forced to introduce targeted lockdowns that have fanned fears for business survival and warnings of a possible double-dip recession. – AFP, October 21, 2020
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