BusinessStocks rally after Biden infrastructure boost

Stocks rally after Biden infrastructure boost


London, United Kingdom: Stock markets rose Thursday as investors weighed US President Joe Biden’s economy-boosting infrastructure project against renewed Covid lockdowns.

Oil prices rallied with the OPEC+ alliance expected to agree on an extension to their current output cuts at a meeting underway.

Shares in Deliveroo steadied one day after the app-driven meals delivery group lost more than a quarter of its value on its stock market launch in London.

Biden said his much-anticipated new package will see a “once-in-a-generation” investment of more than $2 trillion in transportation, telecoms, and energy infrastructure while creating millions of jobs.

And while he warned his eight-year plan, which comes just months after the passage of a $1.9 trillion stimulus, will be paid for by higher taxes for corporations, analysts said markets likely considered that a concern for later this year or next.

“There is no doubt that these markets are addicted to stimulus, and any news which has stimulus inside it, is welcomed by market players with open arms,” noted Naeem Aslam, chief market analyst at AvaTrade.

While there is growing concern that the fast recovery will fan inflation and force banks to tighten their ultra-loose monetary policies, observers remain confident that stocks will press higher this year.

But in an indication that the government spending to prop up the recovery is needed, new applications for jobless benefits in the US jumped last week, reversing most of the improvement in the prior week when the total dipped below 700,000 for the first time since the pandemic shuttered the US economy.

Continuing claims continued to fall modestly, however.

“The key takeaway from the report is that while claims have been trending in the right direction for months, the overall downtrend continues hitting speed bumps like the unexpected increase that was captured in today’s report,” said analyst Patrick J. O’Hare.

Analysts will be watching closely on Friday the non-farm payroll report, which is used as a key guide to the health of the world’s top economy.

Some observers are suggesting the figure could come in above a million new jobs.

On the Covid front, the World Health Organization on Thursday slammed Europe’s vaccine rollout as “unacceptably slow” as the region sees a “worrying” surge in coronavirus infections.

The organization said the sluggish rollout was “prolonging the pandemic” and described Europe’s virus situation as “more worrying than we have seen in several months.”

It comes after French President Emmanuel Macron announced a limited nationwide lockdown to battle soaring Covid-19 cases, while Brazil feared further devastation was ahead after its deadliest month of the pandemic so far.

Key figures around 1330 GMT

London – FTSE 100: UP 0.6 percent at 6,750.84 points

Paris – CAC 40: UP 0.4 percent at 6,092.62

Frankfurt – DAX 30: UP 0.5 percent at 15,077.77

EURO STOXX 50: UP 0.5 percent at 3,937.58

New York – Dow: UP 0.4 percent at 33,101.39

Tokyo – Nikkei 225: UP 0.7 percent at 29,388.87 (close)

Hong Kong – Hang Seng: UP 2.0 percent at 28,938.74 (close)

Shanghai – Composite: UP 0.7 percent at 3,466.33 (close)

Dollar/yen: DOWN at 110.64 yen from 110.71 yen at 2140 GMT

Euro/dollar: UP at $1.1759 from $1.1730

Pound/dollar: UP at $1.3803 from $1.3785

Euro/pound: UP at 85.17 pence from 85.06 pence

Brent North Sea crude: UP 2.0 percent at $64.00 per barrel

West Texas Intermediate: UP 2.4 percent at $60.58 per barrel


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