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Markets

European stocks extend gains on vaccine, Biden

  • London stocks gained 0.9 percent in afternoon trading, while Frankfurt rose by 0.4 percent and Paris added 0.5 percent.
Published November 11, 2020

LONDON: Europe's major stock markets climbed Wednesday, extending bumper gains this week that have been fuelled by a promising coronavirus vaccine trial and Joe Biden's US presidential election victory.

London stocks gained 0.9 percent in afternoon trading, while Frankfurt rose by 0.4 percent and Paris added 0.5 percent.

As trading got underway in New York, the Dow Jones index showed a gain of 0.1 percent.

Oil prices surged higher on hopes for stronger energy demand, while the dollar rose against the euro and yen.

Sterling continued to be supported by hopes that Britain and the European Union will strike a post-Brexit trade deal.

Asian bourses finished on a mixed note earlier in the day as investors struggled to maintain momentum because Donald Trump continued to cast doubt on Biden's win.

Tokyo, Sydney, Seoul and Taipei all rose by 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.

Equities roared higher on Monday after US pharma giant Pfizer and Germany's BioNTech revealed that their candidate for a Covid-19 vaccine had been 90 percent effective, lifting hope that the planet could return to a more normal pace at some point.

"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 nonetheless 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.

Stephen Innes, markets strategist at Axi, said that "the stock markets, which can see through just about everything, are putting too much emphasis on the logistical challenges of distributing the COVID-19 vaccine and too little on it as a real game-changer."

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, claiming without evidence that there was massive electoral fraud and fuelling uncertainty over another US stimulus package.

"Until the result is confirmed, this poses a potential downside risk," remarked Craig Erlam, market analyst at Oanda Europe.

Key figures around 1430 GMT -

London - FTSE 100: UP 0.9 percent at 6,355.74 points

Frankfurt - DAX 30: UP 0.4 percent at 13,221.63

Paris - CAC 40: UP 0.5 percent at 5,444.24

EURO STOXX 50: UP 0.5 percent at 3,460.70

New York - Dow: UP 0.1 percent to 29,461.98

Tokyo - Nikkei 225: UP 1.8 percent at 25,349.60 (close)

Hong Kong - Hang Seng: DOWN 0.3 percent at 26,226.98 (close)

Shanghai - Composite: DOWN 0.5 percent at 3,342.20 (close)

Euro/dollar: DOWN at $1.1753 from $1.1815 at 2200 GMT

Pound/dollar: UP at $1.3217 from $1.3160

Dollar/yen: UP at 105.52 yen from 105.30 yen

Euro/pound: DOWN at 88.94 pence from 89.02 pence

West Texas Intermediate: UP 2.9 percent at $42.56 per barrel

Brent North Sea crude: UP 2.7 percent at $44.79 per barrel

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