While Joe Biden has urged lawmakers to push through his vast infrastructure proposal it could face hurdles in Congress, with even some members of his own Democrats against big tax hikes to pay for it
London (AFP) - World stocks mostly rose Thursday, with London striking its highest level since before the pandemic, with optimism boosted after the Federal Reserve underlined its commitment to record-low interest rates.
London’s benchmark FTSE 100 index surged as high as 6,926.68 points, the highest intra-day level in more than a year, before paring gains.
In the eurozone, Paris advanced but Frankfurt turned flat after an earlier advance.
“UK equities entered 2021 at a big discount to peers but have not enjoyed the same bounce as US or some European markets,” noted Markets.com analyst Neil Wilson.
“At last UK equities are bouncing strongly on a combination of strong UK growth expectations, ongoing monetary policy support and expectations for a strong global recovery.”
Asian markets mostly rose as traders also took heart from Fed meeting minutes reinforcing its intention to keep borrowing costs at record lows for an extended period.
“Optimism surrounding the global economic recovery, supported by an accommodative Federal Reserve, lifted European stocks,” said OANDA analyst Sophie Griffiths.
“The minutes from the March (Fed) meeting didn’t reveal anything new, but a reiteration of the Fed’s supportive stance appears to have been a tonic for the markets.”
Traders also kept tabs on the progress of US President Joe Biden’s huge infrastructure plan.
The broad gains came after yet another record for the S&P 500 on Wall Street, helped by a general mood of optimism that the world economy is on course for a strong recovery as vaccines are rolled out.
Biden was out Wednesday pushing his $2.25 trillion roads-and-bridges plans, warning it was a make-or-break moment to ensure the United States “can lead the world as it has historically done”.
The prospect of another giant spending splurge, coming soon after the passage of his $1.9 trillion stimulus, has added to expectations the country is on course for blockbuster growth.
- Positive outlook -
For now, traders are happy to ride the rally as coronavirus vaccination programmes progress, allowing economies to gradually reopen – even if a little slower in some areas than others.
“The short-term momentum appears to remain in favour of the bulls as investors seem happy and willing to bet on an economic rebound over the coming months in light of the robust data in recent weeks,” said Axi strategist Stephen Innes.
“And on top of all that, equity volatility continued to remain tepid around its lowest levels since the pandemic began, encouraging risk-taking.”
- Key figures around 1030 GMT -
London - FTSE 100: UP 0.2 percent at 6,899.31 points
Paris - CAC 40: UP 0.4 percent at 6,157.65
Frankfurt - DAX 30: FLAT at 15,176.62
EURO STOXX 50: UP 0.3 percent at 3,967.89
Tokyo - Nikkei 225: DOWN 0.1 percent at 29,708.98 (close)
Hong Kong - Hang Seng Index: UP 1.2 percent at 29,008.07 (close)
Shanghai - Composite: UP 0.1 percent at 3,482.55 (close)
New York - Dow: UP 0.1 percent at 33,446.26 (close)
Euro/dollar: UP at $1.1872 from $1.1868 at 2100 GMT
Pound/dollar: UP at $1.3738 from $1.3737
Euro/pound: UP at 86.42 pence from 86.39 pence
Dollar/yen: DOWN at 109.50 yen from 109.85 yen
West Texas Intermediate: DOWN 0.5 percent at $59.47 per barrel
Brent North Sea crude: DOWN 0.3 percent at $62.99 per barrel