Stock markets slightly higher, as dollar drops

London (AFP) – Stock markets mostly rose Wednesday as investors weighed hopes for a virus vaccine against surging infections around the world that threaten an already stuttering economic recovery.

While the mood on trading floors remains broadly optimistic about the long-term outlook, analysts said the coronavirus will continue to cause worry.

Joe Biden’s US election win and news that trials indicated two vaccine candidates had proved to be hugely successful have helped global stock markets bounce back strongly from a painful October.

The breakthroughs by medical giants Pfizer and BioNTech, and Moderna a week later, have fanned hopes that life can begin to return to normal from the start of next year, particularly giving a boost to travel and tourism stocks.

Pfizer boss Albert Bourla on Tuesday said its drug had passed a key safety milestone, meaning it could now seek emergency-use authorisation from US regulators.

“Overall risk sentiment could yet be sustained with more vaccine headlines likely over coming days,” said National Australia Bank’s Tapas Strickland.

“Oxford/AstraZeneca results are said to be ‘imminent’ and if similar to the efficacy seen in the other candidates will be important given the amount of shadow production and supply agreements undertaken by AstraZeneca.”

After a mixed showing Wednesday for Asian stock markets, Europe posted modest gains by the half-way stage.

Wall Street’s three main indices edged lower Tuesday, while the dollar retreated Wednesday.

Crude prices jumped nearly two percent — a day after the OPEC+ club of oil producers agreed they had to be ready to act on output cuts to prevent another slump in prices.

Bitcoin continued its rally, surging above $18,000 in Asian trading hours.

The pound rose waiting to see if Britain and the EU can strike a post-Brexit trade agreement ahead of a December 31 deadline.

“It’s been a frantic few weeks, with the hype around the election barely easing off before vaccine euphoria took over,” Craig Erlam, senior market analyst, Oanda Europe, said Wednesday.

“Perhaps we’re now seeing a little fatigue kicking in ahead of what is likely to be a lively end to the year.”

Raging Covid-19 cases across the US and Europe — and a pick up elsewhere including Japan and South Korea — are of immediate concern, analysts said.

Traders are growing worried also that US lawmakers are not doing enough to agree on a new, much-needed stimulus for the world’s top economy as it shows signs of slowing in the face of the new wave of infections.

Months of talks ahead of the November 3 election failed to reach a breakthrough, and Republicans who are likely to keep power in the Senate show no signs of backing down to Democrat demands for a multi-trillion-dollar package.

With no rescue package on the horizon, hopes are that the Fed will step in at its next meeting and ramp up its bond-buying monetary easing programme.

Reserve boss Jerome Powell on Tuesday warned that “with the virus now spreading at a fast rate, the next few months may be very challenging”.

China-US tensions also remain a concern, with American regulators pushing ahead with a plan that could see Chinese firms delisted from US exchanges if they do not comply with auditing rules, Bloomberg News reported.

– Key figures around 1200 GMT –

London – FTSE 100: UP 0.2 percent at 6,376.21 points

Frankfurt – DAX 30: UP 0.3 percent at 13,166.45

Paris – CAC 40: UP 0.4 percent at 5,504.14

EURO STOXX 50: UP 0.3 percent at 3,479.06

Tokyo – Nikkei 225: DOWN 1.1 percent at 25,728.14 (close)

Hong Kong – Hang Seng: UP 0.5 percent at 26,544.29 (close)

Shanghai – Composite: UP 0.2 percent at 3,347.30 (close)

New York – Dow: DOWN 0.6 percent at 29,783.35 (close)

Euro/dollar: UP at $1.1875 from $1.1862 at 2220 GMT

Pound/dollar: UP at $1.3278 from $1.3254

Dollar/yen: DOWN at 103.89 yen from 104.17 yen

Euro/pound: DOWN at 89.40 pence from 89.47 pence

West Texas Intermediate: UP 1.7 percent at $42.13 per barrel

Brent North Sea crude: UP 1.8 percent at $44.52