European stocks extend gains on vaccine, Biden

The stock exchange in Frankfurt am Main, western Germany. (Photo by Daniel ROLAND / AFP)

LONDON, United Kingdom – Europe’s major stock markets climbed higher Wednesday, extending stunning gains this week that were fuelled by a promising coronavirus vaccine trial and Joe Biden’s US presidential election victory.

London stocks closed with an increase of 1.4 percent, while Frankfurt was 0.4-percent higher and Paris added 0.5 percent.

But by the close of New York trade, the Dow Jones index slipped by just under 0.1 percent as investors took profit on the recent gains.

Asian bourses had 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.

– ‘Big bang’ –

Equities roared on Monday after US pharma giant Pfizer and Germany’s BioNTech announced 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 next year.

“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 vaccinations would take time — with billions of people around the world needing the shot while the economy remains in trouble and the disease continues its rampage.

Health experts also warned that the Pfizer/BioNTech data still needed reviewing.

But 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.”

– Trump risk –

Investors also kept an eye on the result of US elections.

“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,” Mahony cautioned.

The president has refused to concede the election and has launched 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 2115 GMT –

London – FTSE 100: UP 1.4 percent at 6,382.10 points (close)

Frankfurt – DAX 30: UP 0.4 percent at 13,216.18 (close)

Paris – CAC 40: UP 0.5 percent at 5,445.21 (close)

EURO STOXX 50: UP 0.9 percent at 3,471.72

New York – Dow: DOWN 0.08 percent at 29,397.63 (close)

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 $1.1781 from $1.1815

Pound/dollar: UP at $1.3218 from $1.3160

Dollar/yen: UP at 105.42 yen from 105.30 yen

Euro/pound: UP at 89.11 pence from 89.02 pence

West Texas Intermediate: UP 0.4 percent at $41.53 per barrel

Brent North Sea crude: DOWN 0.4 percent at $43.88 per barrel

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Agence France-Presse