Wed, 20 Jan 2021

Investors pushed stock markets higher Friday on continued optimism over vaccines and on signs of progress on a new US stimulus, though surging infections and deaths highlighted the painful, immediate reality of the coronavirus crisis.

In foreign exchange, the pound held its own even as European doubts over a post-Brexit trade deal with Britain boiled over on Friday.

France has threatened a veto as intense negotiations entered what could be their final hours.

The euro meanwhile rose versus the dollar before Friday's release of key US jobs data.

Brent crude oil hit its highest level since March, at close to $50 a barrel, after OPEC and its oil-producing allies on Thursday struck a deal to offer flexibility over changes to production in the coming months.

Elsewhere, the Bombay Stock Exchange's Sensex index passed the 45 000 points mark for the first time after India central bank chief Shaktikanta Das expressed confidence in the local economy.

Das on Friday said Asia's third-largest economy was recovering faster than expected from the pandemic shock, adding that GDP would fall 7.5% this year instead of 9.5% as previously projected.

"There's plenty of enthusiasm around at the moment, whether that be vaccine results or stimulus talks on Capitol Hill," noted Oanda market analyst Craig Erlam.

"For the first time this year, things are looking up and that optimism can be felt throughout these markets."

While the consensus is that the world can next year begin returning to normal as people are inoculated, observers warn lockdowns and other containment measures currently in place are crippling businesses and jobs.

The United States recorded more than 210 000 new cases in a 24-hour stretch to Thursday evening, and more than 2 900 deaths, according to Johns Hopkins University.

And Italy registered 993 deaths, an all-time high.

The figures reinforce the need for governments to maintain restrictions, with Britain, France and Germany among the major economies imposing strict containment measures.

California, the richest state in the US, is on the brink of introducing a limited lockdown.

Focus is also firmly on Washington as US lawmakers appear to be finally inching towards an agreement on a new stimulus for the world's biggest economy before the Christmas break.

Democratic leaders have backed a $908-billion bipartisan proposal as a starting point for discussions, and some top Republicans are also warming to the idea.

Source: News24

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