European shares cheer U.S. stimulus, post-Brexit trade deal

European shares cheer U.S. stimulus, post-Brexit trade deal
  • Clock-gray 19:53
  • calendar-gray 28 December 2020

European shares climbed on Monday for a fourth straight session as relief over long-awaited U.S. economic stimulus and a post-Brexit trade deal lifted investor mood in thin holiday trading, APA reports citing Reuters.

U.S. President Donald Trump on Sunday signed into law a $2.3 trillion pandemic aid and spending package, restoring unemployment benefits to millions of Americans and averting a federal government shutdown in a crisis of his own making.

The benchmark European stock index jumped 0.5% to its highest since Feb. 26, with automakers and energy stocks gaining the most.

London markets were shut for Boxing Day but stocks in Germany, a major supplier of autos to the UK, climbed to a record high, signalling optimism around the Brexit trade deal.

“We can finally breathe a big sigh of relief and say that chaos over the stimulus bill is over,” said Hussein Sayed, chief market strategist at FXTM.

“A sell-off has been averted and this could provide one last boost to risk assets in the last four trading days of the year.”

Huge amounts of stimulus and vaccine optimism have seen the STOXX 600 recover nearly 43% from its March lows, though it is on course to end the year about 4% lower.

Also supporting investor sentiment was Europe’s cross-border vaccination programme launched on Sunday, fuelling hopes of a pandemic-free second half in 2021 and of a strong economic rebound.

Among other European bourses, France’s CAC 40 index and Spain’s IBEX gained nearly 0.7% each, as of 0900 GMT.

Britain signed the Brexit trade deal late on Thursday, just seven days before it exits one of the world’s biggest trading blocs.

However, economists warned that the thin deal would not prevent economic pain and disruption for the United Kingdom or for EU member states, and many aspects of Britain’s future relationship with the EU remained to be hammered out, possibly over years.

apa-logo-mini

Other news