European Stock Markets Surge on Growing U.S. Stimulus Hopes
Stock markets surged Tuesday on optimism that lawmakers in Washington will hammer out a new stimulus package for the crippled American economy, while concerns about the U.S.-China trade pact eased.
Approaching the half-way stage, London's benchmark FTSE 100 index was up 2.5 percent.
In the eurozone, Frankfurt and Paris rallied 2.6 percent.
European indices took "their cues from a positive Asia session, as investors focus on the prospect of a fiscal stimulus deal from U.S. political leaders.... while setting aside concerns about an escalation in U.S.-China trade tensions", noted Michael Hewson, chief market analyst at CMC Markets UK.
Hong Kong rose more than two percent, with Macau casinos rallying on news that China would resume issuing tourist visas to Macau, reopening a crucial revenue stream for resorts that have been battered by a crash in tourist numbers.
Shanghai dropped more than one percent.
There was some relief that China did not include any members of U.S. President Donald Trump's administration in a group of 11 Americans hit with sanctions, in retaliation to a similar U.S. move last week linked to the Hong Kong row.
As the pandemic hustles economies around the world, the U.S.-China stand-off has been a major headache, with the two sides butting heads on several issues that have fanned worries they could renew their damaging trade war.
However, there is some confidence they will stick to their commitments after talks at the weekend to review their January tariffs pact.
Observers have pointed out that Beijing has failed to buy certain products owing to restrictions caused by the coronavirus, but the head of the central People's Bank of China told state media the country would abide by the agreement despite tensions.
"No matter how the international situation changes, the most important thing is to get our own things done and to firmly deepen financial reform and opening-up," Yi Gang told the Xinhua news agency.
Meanwhile, Bloomberg News reported that China would increase buying of soybeans from the US and ditch expensive Brazilian purchases.
"The strong sense is that the Trump administration won't want to jeopardize the deal this side of the election for fear of alienating the important midwest farming constituency," said Ray Attrill at National Australia Bank.
- Next Digital rockets again -
Shares in Next Digital, the media company owned by Hong Kong tycoon Jimmy Lai who was arrested under a Chinese security law, surged 668 percent at one point thanks to pro-democracy activists buying it.
The stock, which ended Friday at HK$0.09, had soared more than 2,0000 percent to HK$1.96 at its Tuesday peak, before easing back to end at HK$1.10.
U.S. lawmakers meanwhile remain deadlocked in their pursuit of a new stimulus, though observers say that with an election around the corner, Democrats and Republicans will likely reach a deal.
Trump's executive orders at the weekend deferring payroll taxes, providing $400 in weekly unemployment benefits and making it harder to evict people eased immediate concerns, though markets say a full deal is key.
"The pressure is on the Democrats to offer a meaningful concession and likely a deal will emerge in the $1.5-2.0 trillion area," said OANDA's Edward Moya.
- Key figures around 1100 GMT -
London - FTSE 100: UP 2.5 percent at 6,201.60 points
Frankfurt - DAX 30: UP 2.6 percent at 13,012.16
Paris - CAC 40: UP 2.6 percent at 5,039.10
EURO STOXX 50: UP 2.5 percent at 3,342.55
Tokyo - Nikkei 225: UP 1.9 percent at 22,750.24 (close)
Hong Kong - Hang Seng: UP 2.1 percent at 24,890.68 (close)
Shanghai - Composite: DOWN 1.2 percent at 3,340.29 (close)
New York - Dow: UP 1.3 percent at 27,791.44 (close)
Euro/dollar: UP at $1.1801 from $1.1737 at 2115 GMT
Dollar/yen: UP at 106.11 yen from 105.95 yen
Pound/dollar: UP at $1.3101 from $1.3065
Euro/pound: DOWN at 90.02 pence from 89.79 pence
West Texas Intermediate: UP 1.5 percent at $42.58 per barrel
Brent North Sea crude: UP 1.1 at $45.50 a barrel
Source: Agence France Presse
| Copyright © 2012 Naharnet.com. All Rights Reserved. | https://naharnet.com/stories/en/274094 |