Stocks surge as Biden begins White House transition

MARKETS

Stock markets climbed Tuesday as news that Donald Trump's team will now work with Joe Biden ahead of his inauguration built on optimism that vaccines could soon be rolled out around the world.

However, the mood on trading floors continues to be tinged by surging virus infections and deaths that have forced governments to impose or consider reimposing economically painful containment measures.

"Signs of movement in the US political deadlock have combined with the steady drip of vaccine news to underpin" stocks, commented Chris Beauchamp, chief market analyst at IG trading group.

Wall Street opened sharply higher, with the Dow jumping 1.0 percent.

"What's prevailing in the stock market right now... is a belief that only good outcomes will prevail, whether we are talking about leadership transitions, the coronavirus, the economy, earnings, interest rates, inflation, and the performance of the stock market itself," Patrick J. O'Hare at Briefing.com said.

In afternoon trading in Europe, London's benchmark FTSE 100 index was up by 1.3 percent, with airlines boosted by news that England will loosen its quarantine rules for travellers from abroad.

Frankfurt's DAX 30 added 1.1 percent, as investors reacted also to data showing that Germany's economy grew by a better-than-expected 8.5 percent in the third quarter.

Earlier in Asia, Tokyo soared more than two percent as investors returned from a long weekend, while Sydney was more than one percent higher.

Singapore, Seoul, Mumbai, Wellington and Jakarta also chalked up healthy gains.

Hong Kong could only eke out a small rise after a local spike in coronavirus infections forced leaders to consider imposing fresh containment measures.

Oil prices climbed to hit the highest levels since the first wave of the pandemic hit.

Bitcoin traded above $19,000 for first time in almost three years, closing in on its all-time high of just under $20,000.

Biden transition

 Late Monday, Trump eased some lingering post-election uncertainty by saying the agency that works with incoming administrations would now work to assist Biden's team.

While the broad consensus has been that Trump would eventually admit defeat, there have been concerns about his refusal to allow Biden to begin work on pandemic response measures and national security matters.

The news came as Biden tipped former Federal Reserve boss Janet Yellen for Treasury Secretary, a move welcomed by traders.

The pairing of Yellen and current Fed chief Jerome Powell "is an exceptionally dovish combination", said Axi strategist Stephen Innes.

"Both have the same views on jobs; they have witnessed policy mistakes like taper tantrum and gnarly market impacts of early rate hikes.

"There will be a mutual agreement for lower for a very, very long time. And that cohesion will be good for the market in general," Innes added.

 
Key figures around 5:30pm Ugandan time

New York - Dow: UP 1.0 percent at 29,891.80 points

London - FTSE 100: UP 1.3 percent at 6,413.90

Frankfurt - DAX 30: UP 1.1 percent at 13,264.58

Paris - CAC 40: UP 1.2 percent at 5,557.88

EURO STOXX 50: UP 1.2 percent at 3,503.30

Tokyo - Nikkei 225: UP 2.5 percent at 26,165.59 (close)

Hong Kong - Hang Seng: UP 0.4 percent at 26,588.20 (close)

Shanghai - Composite: DOWN 0.3 percent at 3,402.82 (close)

Euro/dollar: UP at $1.1850 from $1.1846 at 2150 GMT

Pound/dollar: DOWN at $1.3308 from $1.3325

Dollar/yen: UP at 104.63 yen from 104.54 yen

Euro/pound: UP at 89.04 pence from 88.86 pence

West Texas Intermediate: UP 1.7 percent at $43.80 per barrel

Brent North Sea crude: UP 1.6 percent at $46.80 per barrel