President Donald Trump lifted hopes for a new US stimulus by increasing his offer and suggesting he is open to an even bigger package. ©AFP/File MANDEL NGAN

London (AFP) – Optimism that US lawmakers will eventually pass a new stimulus package lifted most global markets Monday, with the White House ramping up its offer and Donald Trump insisting Republicans want to get a deal done.

Wall Street’s main indices opened higher, with Europe’s top markets mostly higher in afternoon trading after a strong session in most of Asia.

“The gains come amid hopes that lawmakers can hammer out a new fiscal relief package as stimulus negotiations continue,” said analysts at Charles Schwab brokerage.

However London flatlined as investors awaited news of fresh coronavirus restrictions for specific areas in northern England.

“Rising Covid-19 cases, both in the UK and on the continent, plus Brexit concerns coming to a head, could keep the lid on any upwards movement,” noted City Index analyst Fiona Cincotta.

– Roller-coaster ride –

There was another strong lead before the weekend on Wall Street, with hopes for a fresh injection of cash into the world’s top economy overshadowing a surge in virus infections that have forced some governments to reimpose containment measures and targeted lockdowns.

Investors were sent on a roller-coaster ride last week when President Trump first called off talks before doing a U-turn to say they were back on and progressing well.

On Friday, Trump jacked up his offer, proposing a $1.8 trillion package and saying he favoured an even larger package.

The move has instilled optimism that an agreement can be reached, even though the White House plan is $400 billion short of the one put forward by the Democrats, and both Democrats and Republicans dismissed it over the weekend.

With Joe Biden well ahead in opinion polls, analysts say traders are increasingly betting he will win next month’s election comfortably — avoiding the uncertainty of a Trump challenge to the result — and Democrats will take both houses of Congress.

– Fresh wave of infections –

Hong Kong and Shanghai led Asian markets higher, both piling on more than two percent with support also coming from hopes President Xi Jinping will use a speech in Shenzhen later this week to announce a further opening up of China’s economy.

Sydney, Seoul, Singapore, Jakarta and Wellington also enjoyed healthy gains but Tokyo ended down.

On the corporate front, shares in airline group IAG slid 0.8 percent in London after the group announced the shock departure of British Airways chief executive Alex Cruz.

Faced with the global travel crisis, IAG stock has plummeted by a staggering 75 percent since the start of the year — making it the worst performer listed on London’s FTSE 100 index.

– Key figures around 1330 GMT –

London – FTSE 100: DOWN less than 0.1 percent at 6,014.63 points

Frankfurt – DAX 30: UP 0.6 percent at 13,122.96

Paris – CAC 40: UP 0.7 percent at 4,982.55

EURO STOXX 50: UP 0.7 percent at 3,296.59

New York – Dow Jones: UP 0.3 percent at 28,671.68

Tokyo – Nikkei 225: DOWN 0.3 percent at 23,558.69 (close)

Hong Kong – Hang Seng: UP 2.2 percent at 24,649.68 (close)

Shanghai – Composite: UP 2.6 percent at 3,358.47 (close)

Euro/dollar: DOWN at $1.1808 from $1.1826 at 2100 GMT

Pound/dollar: UP at $1.3041 from $1.3036

Dollar/yen: DOWN at 105.33 yen from 105.62 yen

Euro/pound: DOWN at 90.56 pence from 90.72 pence

West Texas Intermediate: DOWN 1.7 percent at $39.90 per barrel

Brent North Sea crude: DOWN 1.6 percent at $42.16 per barrel

burs-rl/bp

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.