by Roland JACKSON
World stock markets mostly rose Friday on US stimulus hopes and bright company earnings, but gains were capped by broadly downbeat survey data in the eurozone, dealers said.
US lawmakers are attempting to hammer out a fresh economic rescue package, while investors were largely unmoved by the final presidential debate between Donald Trump and Joe Biden before the November 3 vote.
Democratic House Speaker Nancy Pelosi said both parties “continue to be engaged in negotiations, and I am hopeful we will be able to reach an agreement”, but she warned that opposition to a massive spending plan from Senate Republicans posed a huge hurdle.
Pelosi has sought this week to pin down a deal with Republican President Trump’s Treasury Secretary Steven Mnuchin.
– ‘Encouragement in uncertain times’ -“Stock markets (are) getting a bit of a boost into the end of the week as Mnuchin and Pelosi work towards a stimulus package — and earnings offer encouragement in these uncertain times,” said OANDA analyst Craig Erlam.
Bets on a Biden win and a Democratic sweep of both houses of Congress have risen recently, with the consensus being that such an outcome would see the passage of an even bigger stimulus than the one of around $2 trillion being discussed now.
Sentiment was also buoyed after the US Food and Drug Administration on Thursday granted full approval to Gilead’s antiviral drug remdesivir as a treatment for patients hospitalised with Covid-19, after conditional authorisation was given in May.
“Gilead has the first official treatment. Obviously, a vaccine would be much more welcomed, but the treatment is a great leap forward, and there is a sense that a corner has been turned in the fight against the virus,” noted CMC Markets analyst David Madden.
– Europe shrugs off data -In Europe on Friday, Frankfurt, Paris and London stocks advanced despite survey data showing that economic activity shrank due to a resurgence in coronavirus.
London was also boosted by bright earnings from British bank Barclays and rebounding official retail sales.
Data provider IHS Markit said that its closely watched composite eurozone PMI index fell in October for the third consecutive month to 49.2 points from 50.4 points in September.
Any reading above 50 points indicates that business activity is expanding, but a level below 50 points means the economy is contracting.
The country index for Germany slid fractionally to 54.5 points, but at that level it nevertheless registered solid expansion. The barometer for France however declined to 47.3 from 48.5.
Britain’s composite PMI slipped to 52.9 from 56.5 as the novel coronavirus curbed activity once more.
A fresh surge in new coronavirus cases across the US and Europe is fuelling concerns that the already stuttering economic recovery could be knocked further off course.
A second wave with record new cases has already forced major economies including Britain, France and Germany to impose partial lockdown measures, leading businesses to warn of massive job losses.
– Key figures around 1045 GMT -London – FTSE 100: UP 1.4 percent at 5,863.83 points
Frankfurt – DAX 30: UP 0.8 percent at 12,637.03
Paris – CAC 40: UP 1.1 percent at 4,903.62
EURO STOXX 50: UP 0.8 percent at 3,196.37
Tokyo – Nikkei 225: UP 0.2 percent at 23,516.59 (close)
Hong Kong – Hang Seng: UP 0.5 percent at 24,918.78 (close)
Shanghai – Composite: DOWN 1.0 percent at 3,278.00 (close)
New York – Dow Jones: UP 0.5 percent at 28,363.66 (close)
Euro/dollar: UP at $1.1849 from $1.1818 at 2100 GMT
Dollar/yen: DOWN at 104.64 yen from 104.86 yen
Pound/dollar: DOWN at $1.3081 from $1.3145
Euro/pound: UP at 90.54 pence from 90.33 pence
West Texas Intermediate: UP 0.2 percent at $40.72 per barrel
Brent North Sea crude: UP 0.3 percent at $42.57
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