UK Markets closed

European stock markets close lower as UK parliament votes in favour of Brexit deal

Kumutha Ramanathan
·2-min read
Houses of Parliament and Big Ben in London. Photo: Getty
Houses of Parliament and Big Ben in London. Photo: Getty

London’s FTSE (^FTSE) and its European peers closed lower after the UK’s House of Commons voted in favour of the Brexit deal, hours after the European Union’s top officials also officially signed the deal into agreement on Wednesday.

The FTSE 100 (^FTSE) closed lower 0.8% in London. Germany’s DAX (^GDAXI) fell 0.3% in Frankfurt, while the CAC 40 (^FCHI) was down just 0.2% in Paris.

US markets were in positive territory at around 4.50pm in London. The S&P (^GSPC) was up 0.3%. Dow Jones (^DJI) gained 0.6% and the Nasdaq (^IXIC) was higher 0.3%.

London’s (^FTSE) gained traction in early trading on Wednesday as the focus for markets briefly returned to the fight against COVID-19. On Wednesday, the UK became the first country in the world to approve a coronavirus vaccine developed by Oxford University and AstraZeneca (AZN.L), as case numbers are driven higher by new, highly contagious variants of the virus. The new Oxford-AstraZeneca vaccine has been authorised as a two-dose regime, with Britain ordering 100 million doses.

Meanwhile in the US, politicians are divided on details of the $2.3tn (£1.68tn) stimulus bill, in particular the size of the payout cheques.

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“Global equities suffered their first set back of the week as New Year's Eve pipe dreams fade that bigger government paychecks will soon be on the way triggering some profit-taking in US stocks” said Stephen Innes, chief global market strategist.

An increasing number of Republicans on Tuesday supported US president Donald Trump’s demand to increase COVID-19 relief payments to US citizens from $600 to $2,000. Yet, US equity markets retreated after Senate Republican Leader Mitch McConnell effectively blocked increasing direct payments to $2,000.

Trump tweeted on Tuesday that “$2000 for our great people, not $600!,” and adding that Republicans must approve the payments “unless they have a death wish.”

Despite the tussle over US stimulus relief, investors are seeing more reassuring signs that the global economic recovery is underway, with the historic Brexit deal being achieved last Thursday, sending the FTSE (^FTSE) to a record 9-month high on Tuesday, and the global COVID-19 immunisation programme being underway.

Asian markets were largely in positive territory as they focused on the global economic recovery. While Japan’s Nikkei (^N225) fell 0.5% at market close, the Hong Kong Hang Seng (^HSI) leapt up 2.1%, and the Shanghai Composite (000001.SS) gained 1.1% at market close. South Korea’s KOSPI (^KS11) headed higher 1.9%.

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