Vaccine, Brexit hopes buoy global stocks

LONDON: European and US stock markets gained ground Monday, buoyed by Covid-19 vaccine optimism, expectations of fiscal support from Washington and hopes of a last-minute Brexit deal.

In morning trading, the Dow Jones Industrial Average climbed 0.4 percent as a New York nurse became the first person in the US to receive the Pfizer-BioNTech inoculation following its emergency authorisation last week.

The broader-based S&P 500 was up by a similar amount, with markets also eyeing a $908 billion bipartisan stimulus plan set to be presented by lawmakers Monday.

"Encouraging news about Covid-19 vaccines has boosted hope for stronger growth," Charles Schwab analysts noted.

The rollout of vaccines is keeping traders optimistic, even as surging infections force governments to impose strict containment measures, with Germany the latest to announce a lockdown.

US regulators gave the go-ahead for the use of the Pfizer-BioNTech vaccine on Friday and officials said 20 million Americans could receive a first of two required injections by the end of the year and 100 million by March.

Congress' bipartisan spending push means "fiscal relief optimism is resurfacing," although "there is no guarantee that an agreement will be made as it has been elusive for several months," the Schwab analysts added.

While Washington has haggled, "some emergency benefits have expired, a plethora of small businesses have been shut down and unemployment has remained painfully elevated," they recalled.

In Europe, glimmers of hope for a last-minute Brexit deal kept markets looking up through the close of trading, with Germany's DAX 30 adding 1.0 percent, the French CAC 40 0.5 percent and the Euro Stoxx 50 0.7 percent.

An EU diplomat said that the Brussels' chief negotiator with London Michel Barnier had spoken of a "narrow path" to a trade deal to govern relations once a standstill transition period expires on December 31.

Prime Minister Boris Johnson and EU chief Ursula von der Leyen had said after a crisis call that they would "go the extra mile" to find common ground in long-running talks between Brussels and London.

They agreed to extend the negotiations beyond the Sunday deadline, with sticking points on issues including fishing rights and fair trade regulations.

The news gave the pound a boost against the dollar and euro, although Johnson warned a deal was far from sure with less than three weeks until Britain leaves the single market on December 31.

"I'm afraid we're still very far apart on some key things, but where there's life there's hope," he said.

The talks between the EU and Britain said there was still hope of a last-minute deal, according to OANDA analyst Craig Erlam.

"It does seem like some progress is being made and with neither side willing to be the ones to call off the talks; a minute-to-midnight compromise looks likely," Erlam said.

"This is a negotiation after all and there's nothing to be gained by showing your hand at this point."

With the pound stronger, London's multinational-heavy FTSE 100 index was weighed down, shedding 0.1 percent.

Key figures around 1630 GMT -

London - FTSE 100: DOWN 0.1 percent at 6539.98 points

Frankfurt - DAX 30: UP 1.0 percent at 13,242.39

Paris - CAC 40: UP 0.5 percent at 5,536.84

EURO STOXX 50: UP 0.7 percent at 3,509.02

New York - Dow: UP 0.4 percent at 30,157.07

Tokyo - Nikkei 225: UP 0.3 percent at 26,732.44 (close)

Hong Kong - Hang Seng: DOWN 0.4 percent at 26,389.52 (close)

Shanghai - Composite: UP 0.7 percent at 3,369.12 (close)

Pound/dollar: UP at $1.3322 from $1.3224 at 2200 GMT

Euro/pound: DOWN at 91.09 pence from 91.59 pence

Euro/dollar: UP at $1.2152 from $1.2112

Dollar/yen: DOWN at 104.05 yen from 104.24 yen

West Texas Intermediate: DOWN 0.6 percent at $46.30 per barrel

Brent North Sea crude: DOWN 0.4 percent at $49.77