Markets are rising as investors see better chances for a sweep by Joe Biden and Democrats, which would break the political logjam in Washington on a new stimulus package for the US economy. ©AFP Brendan Smialowski

London (AFP) – Stock markets were firmer Thursday, with investors increasingly confident Joe Biden and the Democratic Party will win the US presidency and both houses of Congress, paving the way for a huge new coronavirus stimulus package, analysts said.

The gains came against the backdrop of sharply rising coronavirus case numbers in Europe, with top economy Germany warning that the pandemic could get out of control as governments tightened restrictions.

The focus however was on the United States after President Donald Trump’s decision to break off talks for a second rescue package gave global traders a massive jolt on Tuesday.

He then appeared to change tack again, making a call for targeted help — including $1,200 handouts for Americans and help for small businesses — which lifted hopes.

In his latest comments on Thursday, Trump said there was a “really good chance” of getting a deal with the Democrats.

“The market realises that whoever wins (the election), more than likely Biden now, there is going to be significant stimulus and additional infrastructure spending,” said Andy Brenner, head of international fixed income at National Alliance.

Opinion polls put Biden well ahead nationally and enjoying leads in battleground states such as Florida, where polling website FiveThirtyEight says Trump is losing the crucial senior vote.

A Biden victory and Democrats taking the Senate and House is accordingly being priced into markets, as traders grow increasingly optimistic for a bigger rescue plan than what was being discussed before talks were curtailed Tuesday.

Democrats initially proposed a stimulus of more than $3 trillion before lowering it during negotiations with the Republicans.

The New York markets made substantial gains of close to two percent on Wednesday, ensuring Asia got off to a good start on Thursday and with Europe following suit.

– Key figures around 1600 GMT –

New York – Dow Jones: UP 0.2 percent at 28,369.07 points

London – FTSE 100: UP 0.5 percent at 5,978.03

Frankfurt – DAX 30: UP 0.9 percent at 13,042.21

Paris – CAC 40: UP 0.6 percent at 4,911.94

EURO STOXX 50: UP 0.7 percent at 3,2555.76

Tokyo – Nikkei 225: UP 1.0 percent at 23,647.07 (close)

Hong Kong – Hang Seng: DOWN 0.2 percent at 24,193.35 (close)

Shanghai – Composite: Closed for a holiday

Euro/dollar: DOWN at $1.1753 from $1.1765 at 2100 GMT

Pound/dollar: UP at $1.2942 from $1.2913

Dollar/yen: UP at 105.98 yen from 105.96 yen

Euro/pound: DOWN at 90.81 pence from 91.04 pence

West Texas Intermediate: UP 2.0 percent at $40.84 per barrel

Brent North Sea crude: UP 2.0 percent at $42.97 per barrel

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