HomePoliticsStocks go on record romp fuelled by US stimulus, Brexit deal

Stocks go on record romp fuelled by US stimulus, Brexit deal

Asia also scored new pinnacles, with Tokyo soaring 2.7% to end at a 30-year high. (AP pic)

LONDON: Stocks on both sides of the Atlantic extended their romp in record territory on Tuesday fuelled by US stimulus and the Brexit deal.

Wall Street’s leading indices pushed further into record territory when trading, with the Dow climbing by 0.6%.

Investor sentiment has been given another shot in the arm after US President Donald Trump signed a US$900 billion Covid-19 economic stimulus bill late on Sunday.

“The hunt for records continues,” said Comdirect analyst Andreas Lipkow.

Trump had held off signing the US virus stimulus package for almost a week, saying it did not provide enough cash to Americans and calling for handouts to be jacked up to US$2,000 from the US$600 offered in the initial bill.

Democrats agreed more was needed and on Monday the House of Representatives approved a motion to increase the payments.

Frankfurt’s DAX index also powered its way Tuesday to new heights, extending its record-breaking run as the market ends a turbulent year on a strong note.

Meanwhile, London stocks surged with investors relieved over Britain’s long-awaited Brexit deal with the EU, with the British capital’s benchmark FTSE 100 index jumping 2.1% in afternoon deals, having last traded on Christmas Eve before the announcement of a long-awaited post-Brexit trade deal.

Britain and the European Union finally struck a trade deal Thursday to cushion the economic blow of Brexit, in a major boost to Conservative Prime Minister Boris Johnson.

The pound climbed against the dollar and the euro, as dealers continued to digest the 1,246-page agreement document.

“The Brexit deal is really a blessing … for the UK and for the FTSE 100 index. There is no doubt that the FTSE 100 has been a laggard index and now is its time to shine,” AvaTrade analyst Naeem Aslam told AFP.

He added: “European stocks are still very much in Santa rally mode and traders only want to push stocks higher because they know that there is enough tailwind for the stock market in 2021.”

The EU gave the green light to the deal on Monday, paving the way for it to come into effect in the New Year.

Britain’s parliament will seek to ratify it this week.

“Markets seem to be welcoming the Brexit deal,” noted AJ Bell investment director Russ Mould.

“However, the agreement struck between London and Brussels is yet to win universal acclaim – even if that is the inevitable result of the compromises that the Prime Minister had to make to get the deal over the line.”

Elsewhere, Asian markets mostly rose Tuesday following a record-breaking lead from Wall Street, as investors cheered the passage of a huge US stimulus bill which has helped temper fears about surging coronavirus infections.

Asia also scored new pinnacles, with Tokyo soaring 2.7% to end at a 30-year high.

European nations meanwhile continue to ramp up vaccinations, adding to optimism of a route out of the coronavirus pandemic.

Yet governments around the world have been forced to impose lockdowns and other strict, economically painful measures to contain surging Covid-19 cases.

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