Global shares end extraordinary week at new highs as investors bet on Biden
President-elect Joe Biden. File Picture: AP Photo/Susan Walsh
Global shares ended an extraordinary week, with strong gains in Europe and US stocks reaching at new records as investors hailed the clean-sweep political control of Congress by President-elect Joe Biden amid the Washington assault by a mob on the Capitol.
The potential of more stimulus funds from the new Biden administration for the US economy which is among the most battered in the world from the flare-up in Covid-19 crisis helped buoy shares across the world despite the worsening economic toll from the pandemic.
The latest official US jobs report showed "a staggering" loss of jobs since December.
"Nonetheless, 2021 has gotten off to a strong start for equities, which have rallied on hopes that the new US administration will seize the day and enact new stimulus measures, which should help drive an economy already bolstered by the arrival of vaccines," said Chris Beauchamp, chief market analyst at IG, an online broker.
In the US, the S&P 500 and Nasdaq hit new record highs during the trading day before easing back following the dire US jobs report.
“We have the solution to the virus and as we get that solution out into the country and shots into people’s arms, I don’t think (jobs report) would be a real headwind,” said Ross Mayfield, investment strategy analyst at Baird.
“The party in control is going to want to inject a lot of stimulus and spending into the economy which in the near-term will be good for economic growth and the market is pleased with the result,” Mr Mayfield said.
Market participants looked past mounting calls among congressional Democrats for impeaching President Donald Trump for a second time, two days after his false claims of election fraud helped encourage a mob that stormed the US Capitol.
European stocks logged their strongest weekly gains since November, with Germany’s Dax hitting a record high.
Here, AIB shares ended the week little changed as investors assessed the effects of the latest lockdown on the economy here. Its shares are down 47% from a year ago.
The two main banks are used by international investors as proxies for the domestic Irish economy. Shares in Bank of Ireland fell around 3% in the latest session. It has lost 27% in the past year.
Ryanair shares were little changed but the airline shares are up 5% in the year despite the huge turbulence to the industry as investors bet it will emerge even stronger from the crisis.
The pan-European Stoxx 600 index rose 0.7% to bring gains for the first week of 2021 to 3%, largely driven by hopes that a Democrat sweep of the US Senate would lead to a large US fiscal stimulus package.
The Stoxx 600 trades nearly 5% below its record high hit in February 2020.
Germany’s Dax index outperformed after data showed both industrial output and exports rose more than expected in November.
Travel stocks got a boost after French catering and food services group Sodexo raised its margin outlook for the first half of 2021.
Rival Compass also gained. Marks & Spencer slipped after it reported another big fall in sales of clothing and homewares in the three months leading up to Christmas.
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