A wealthy Republican with no formal economics training, Jerome Powell nonetheless won support from Democratic President Joe Biden to lead the Federal Reserve for a second term

London (AFP) - US equities rose Monday as Federal Reserve chairman Jerome Powell was renominated for another term, but other stock markets fell as investors fretted over inflation and possible new pandemic lockdowns in Europe.

Stock prices on Wall Street were higher after US President Joe Biden nominated Powell for a second four-year term.

But by the end of the session in Europe, stock prices in Paris shed 0.1 percent and prices Franfurt were down by 0.3 percent, while London closed 0.4 percent higher.

“There’s been so much anxiety about inflation and interest rates that investors are clearly apprehensive about over-committing,” said OANDA analyst Craig Erlam.

“And that anxiety has been exacerbated by the prospect of lockdowns in Europe, following Austria’s announcement on Friday,” he said.

On Friday, Austria surprised the markets by returning to a partial lockdown, not just for the unvaccinated as had been previously planned.

In Germany, outgoing Chancellor Angela Merkel warned that the country’s current Covid curbs – including barring the unvaccinated from certain public spaces – “are not enough”.

“European stocks slipped as Angela Merkel fanned concerns over the fourth wave of Covid in Europe,” said ThinkMarkets analyst Fawad Razaqzada.

“The fear among market participant (is) that fresh lockdowns could be introduced in other parts of Europe, making the road to recovery from the pandemic even bumpier and raising concerns over the efficacy of the vaccines,” Razaqzada said.

“So, there is now a real possibility we may see at least a short-term correction, as investors wake up to the risks facing the eurozone economy, after the major stock indices hit repeated all-time highs in recent weeks.”

- Powell reappointed -

Analysts said Biden’s decision to reappoint Powell as head of the Fed came as no real surprise.

Appointed by Biden’s Republican predecessor Donald Trump and taking office in 2018, Powell has led the Fed’s response to the massive pandemic downturn, which saw it slash its lending rate to zero and roll out trillions of dollars in liquidity.

A wealthy Republican with no formal economics training, Powell nonetheless won Biden’s support for a second term.

“With inflation still running well above the central bank’s target, traders will now turn their eyes to the December Fed meeting and whether the central bank will accelerate its tapering pace,” said Forex.com analyst Matt Weller.

“In any event, Powell’s reappointment was always the market’s ‘base case’ – though far from a done deal – so market movements have been relatively limited on the official announcement.”

Earlier, Asian stock markets finished mixed as investors mulled Europe’s new containment measures alongside growing speculation of interest rate hikes to tame spiking inflation.

Oil was higher, regaining some of its earlier losses after major consumers including the United States considered releasing some of their reserves to keep a lid on prices, which have been a key reason for elevated inflation this year.

Crude had tumbled Friday on fears of adverse demand fallout from the fast-moving Covid crisis.

- Key figures around 1645 GMT -

New York - Dow: UP 0.9 percent at 35,908.56 points

London - FTSE 100: UP 0.4 percent 7,255.46 (close)

Frankfurt - DAX: DOWN 0.3 percent at 16,115.69 (close)

Paris - CAC 40: DOWN 0.1 percent at 7,105.00 (close)

EURO STOXX 50: DOWN 0.4 percent at 4,338.69

Tokyo - Nikkei 225: UP 0.1 percent at 29,774.11 (close)

Hong Kong - Hang Seng Index: DOWN 0.4 percent at 24,951.34 (close)

Shanghai - Composite: UP 0.6 percent at 3,582.08 (close)

Euro/dollar: DOWN at $1.1263 from $1.1290 at 2200 GMT

Euro/pound: UP at 83.97 pence from 83.92 pence

Pound/dollar: DOWN at $1.3413 from $1.3451

Dollar/yen: UP at 114.81 yen from 113.99 yen

Brent North Sea crude: UP 1.2 at $79.83 per barrel

West Texas Intermediate: UP 1.3 percent at $76.90 per barrel

burs-spm/cdw