European markets ended sharply higher on Wednesday, with investors betting on additional fiscal stimulus in the U.S.
The European Commission’s nod to Moderna’s Covid vaccine for use in the European Union, and higher crude oil prices too contributed to the gains.
Democrats won one hotly contested U.S. Senate race in Georgia and pulled ahead in a second, raising hopes for larger stimulus in the world’s largest economy.
Winning both seats would allow Democrats to avert gridlock in Congress and give Biden a chance to enact his legislative agenda.
Worries about increasing number of cases of new variants of coronavirus in the continent weighed a bit and limited markets’ gains.
The pan European Stoxx 600 climbed 1.36%. The U.K.’s FTSE 100 spurted 3.47%, Germany’s DAX gained 1.76% and France’s CAC 40 ended 1.19% up, while Switzerland’s SMI advanced 0.5%.
Among other markets in Europe, Austria, Belgium, Czech Republic, Iceland, Ireland, Netherlands, Norway, Portugal, Russia, Spain and Turkey ended with sharp to moderate gains.
Denmark, Finland, Greece and Sweden drifted lower, while Poland ended flat.
In the German market, Deutsche Bank, Allianz, Bayer, BASF, Lufthansa, Siemens, Linde, RWE, HeidelbergCement, Fresenius, Wirecard, Thyssenkrupp and Munich RE gained 2.5 to 6%.
Volkswagen, Daimler, Vonovia, Merck and Deutsche Wohnen ended notably lower.
In France, Societe Generale spurted more than 7%. BNP Paribas gained nearly 6%, while Total, Credit Agricole, Engie, Bouygues, Accor, Veolia, Schneider Electric and Legrand gained 3 to 5%.
Peugeot, Pernod Ricard, Dassault Systemes and Teleperformance declined sharply.
In the UK market, HSBC Holdings and Standard Chartered Bank climbed nearly 10% and 9.4%, respectively. Barclays Group ended higher by 8.25%. WPP, CRH, Glencore, Natwest Group, Royal Dutch Shell, Anglo American Plc, BP, Informa, Rio Tinto and Legal & General gained 6 to 8%.
In economic news, U.K. shop prices continued to fall in December, data from the British Retail Consortium revealed. The shop price index declined 1.8 percent on a yearly basis in December, the same rate as seen in November.
The UK service sector contracted more than initially estimated at the end of 2020. final survey data from IHS Markit showed. The final IHS Markit/Chartered Institute of Procurement & Supply services Purchasing Managers’ Index rose to 49.4 in December from 47.6 in November.
French consumer prices remained stable on a yearly basis in December, after rising 0.2% in November, the provisional estimate revealed. Final data is due on January 15.
French consumer confidence strengthened notably in December, monthly survey results from the statistical office Insee showed Wednesday.
The consumer sentiment index rose more-than-expected to 95 in December from 89 in November. The expected reading was 91.
Final data from IHS Markit showed the European composite output index climbed to 49.1 in December from 45.3 a month ago. The final result was lower than the earlier flash score of 49.8 and a reading below 50 suggests contraction.
The services Purchasing Managers’ Index came in at 47.0, up from 46.0 in November. The flash score was 47.7.
Eurozone producer prices index decreased 1.9% year-on-year in November, after a 2.0 percent fall in October, data from Destatis showed. Economists had forecast a fall of 2.2%.
Germany’s consumer price index dropped 0.3% year-on-year in December, same as in November. Compared to the previous month, consumer prices rose 0.5% after a 0.8% slump in November. Economists were looking for a 0.6% increase.
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