Stocks mixed as bleak UK data offsets US vaccine and stimulus hopes
European stocks were mixed on Wednesday, as UK economic data showed firms’ output contracting but news on US vaccine, stimulus and earnings boosted global sentiment.
In Europe, Germany’s DAX (^GDAXI) rose 0.3%, France’s CAC 40 (^FCHI) was up 0.1% and the Europe-wide Stoxx 600 (^STOXX) rose 0.6%. Inflation data was in focus, with EU figures showing eurozone price growth at the fastest in more than a year.
The FTSE (^FTSE) opened higher but was trading 0.2% loewr by mid-afternoon in London, after purchasing managers’ index (PMI) data for the dominant services sector showed the sharpest output decline in eight months.
Stronger hopes of recovery in the world’s biggest economy boosted the mood on global markets, with many investors’ worries easing over the fallout of the Reddit-fuelled short squeeze.
The White House confirmed plans to hike weekly vaccine supplies to 11.5 million doses, distributing doses directly to up to 40,000 pharmacies. New president Joe Biden had condemned the pace of the rollout under his predecessor.
Congress also moved a step closer to signing off Biden’s $1.9tn (£1.3bn) stimulus package in spite of Republican opposition on Tuesday.
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The House and the Senate both voted to start a budget resolution debate, with the Democrats’ majorities proving crucial as politicians voted on party lines.
A separate, more detailed relief bill will have to be drafted and voted on for the stimulus package to become law, with final votes unlikely until March, according to Reuters.
Meanwhile record earnings from Amazon (AMZN) and surging advertising revenue at Google’s parent company Alphabet (GOOG, GOOGL) saw both stocks jump in pre-market trading, and boosted wider stock indices.
US futures had been trading higher after strong gains on Monday and Tuesday, but stocks were more mixed at the open. The Dow Jones index (^DJI) dipped 0.2%, but the S&P 500 (^GSPC) edged 0.1% higher and the Nasdaq (^IXIC) rose 0.4%.
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Vaccine developments further boosted sentiment. “Another bout of good news on the vaccine front has helped lift stocks, with the recent volatility being left behind for now,” said Joshua Mahony, senior market analyst at IG.
“News that the AstraZeneca vaccine appears to slow the transmission of the virus has been heralded as a significant breakthrough.”
Most Asian stock indices had also risen overnight. Japan’s Nikkei (^N225) was up 1% and the Kospi (^KS11) in South Korea rose 1.1%.
But Hong Kong’s Hang Seng Index (^HSI) lost 0.2%, ad the Shanghai Composite Index (000001.SS) lost 0.5%.
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