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European markets mixed ahead of COVID-19 vaccine rollout and US bipartisan bill

Kumutha Ramanathan
·Contributor
·3-min read

WATCH: UK vaccine rollouts in focus

European markets had modest moves on Thursday as the US and UK prepared to embark on immunisation programmes, and US considers a bipartisan COVID-19 relief bill.

The UK became the first western nation to approve a coronavirus vaccine. In the first phase, 800,000 doses of the Pfizer (PFE) and BioNTech (BNTX) vaccine will be made available for about 30% of the population, largely in the high risk category, including the elderly and frontline healthcare workers.

European markets opened modestly on Thursday and closed slightly mixed. The FTSE 100 (^FTSE) was 0.4% higher in London. Germany’s DAX (^GDAXI) was down 0.4%, the CAC 40 (^FCHI) fell 0.2% in France, and the FTSE MIB (FTSEMIB.MI) fell 0.3% in Italy.

READ MORE: UK approval of world’s first mRNA COVID-19 vaccine sparks hope of a drug revolution

US markets were positive in mid-day trading. The S&P (^GSPC) was up 0.2%, while the Dow Jones (^DJI) gained 0.6% and the Nasdaq (^IXIC) also rose modestly 0.5%.

The pound was also in focus as Brexit talks extended into overtime.

WATCH: UK approves use of Pfizer's coronavirus vaccine – rollout from Tuesday

Sterling was up 0.6% against the euro at €1.1104 (GBPEUR=X) at around 4.28pm on Thursday. The pound was up 0.9% against the dollar to $1.3492 (GBPUSD=X).

The muted price action comes as investors and traders wait for developments in Brexit talks between the EU and UK.

Expectations of an American fiscal support package has also helped investor sentiment. The US Food and Drug Administration is holding its advisory committee next week to confirm a vaccine rollout plan, while the European Medicines Agency has stated that it may give emergency approval on 29 December, as it needs more time to review evidence.

A US COVID-19 relief bill also looks likely as Democrats have lowered their expectations, with House speaker Nancy Pelosi and Senate minority leader Chuck Schumer indicating support for a $908bn (£681bn) stimulus proposal, marking a new phase in negotiations with the White House.

Despite this, disappointing US private payrolls data on Wednesday showed fewer jobs were added in November as the country continues dealing with the fallout from COVID-19, contributing to swings in major US indices in the last session amid fears the US economy may be slowing down.

UK will start rolling out COVID-19 vaccines from next week Photo: Dado Ruvic/Reuters
UK will start rolling out COVID-19 vaccines from next week Photo: Dado Ruvic/Reuters

READ MORE: UK high streets in crisis as 200,000 jobs disappear in 12 months

Positive overnight Chinese data had a moderate impact on Asian market performance, despite the Caixin services PMI reading rising to 57.8, beating estimates of 56.4 and the prior reading of 56.8.

This is likely due to the US House of Representatives giving its approval overnight of a bill that restricts Chinese firms from listing in the US. As a result, “Chinese technology stocks opened sharply lower, triggering profit-taking and not likely the beginning of a new trend,” said Edward Moya, senior market analyst at OANDA.

“This could ultimately lead to Chinese companies – such as Alibaba Group and Baidu – getting delisted from American exchanges if regulators aren’t allowed to review their financial audits,” said Deutsche Bank in a note on Thursday. The legislation has now moved to president Trump’s desk, and he is expected to sign it.

Oil prices slid lower on Thursday as producers, such as Saudi Arabia and Russia, remain divided over the need to extend record production cuts put in place when the first wave of COVID-19 hit.

Asian markets were mixed at market close. Japan’s Nikkei (^N225) was up 0.03%, the Hong Kong Hang Seng (^HSI) gained 0.7%, and the Shanghai Composite (000001.SS) fell 0.2%, while the Shenzen Component (399001.SZ) rose just 0.1%. South Korea’s KOSPI (^KS11) went higher 0.8%.

WATCH: UK approves Pfizer-BioNTech COVID vaccine