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FTSE rebounds and closes higher as Biden victory is certified

Kumutha Ramanathan
·Contributor
·3-min read
The US Capitol in Washington DC was mobbed and run over by Donald Trump supporters on Wednesday. Photo: Olivier Douliery/AFP via Getty
The US Capitol in Washington DC was mobbed and run over by Donald Trump supporters on Wednesday. Photo: Olivier Douliery/AFP via Getty

London’s FTSE 100 (^FTSE) recovered after a mid-day dip as US lawmakers certified president-elect Joe Biden's victory, after incumbent Donald Trump’s supporters stormed the Capitol in an attack that left four people dead.

Trump has also said there will be “an orderly transition” after Congress concluded the electoral vote count certifying the election outcome, according to PA Media.

Following the victories of Jon Ossoff and the Reverend Raphael Warnock, both Democrats, in the Georgia dual runoff race, the party now controls the House, Senate and the presidency.

London's blue-chip index took a dip in mid-day trading but then recovered at market close. Chart: Yahoo Finance
London's blue-chip index took a dip in mid-day trading but then recovered at market close. Chart: Yahoo Finance

The FTSE 100 (^FTSE) closed up 0.5% in London. Germany’s DAX (^GDAXI) gained 0.7% in Frankfurt, while the CAC 40 (^FCHI) was also higher 0.9% in Paris.

US markets were in the green at the end of the London trading day. The S&P (^GSPC) was up 1.5%. Dow Jones (^DJI) gained 0.9% and the Nasdaq (^IXIC) was higher 2.4%.

Watch: European stocks reverse early gains

“Yesterday’s [Wednesday] chaos in Washington has not affected the global rebound in equities, which have made further gains now that Joe Biden is the undisputed winner of the US election and has control of the Senate as well as the lower house,” said Chris Beauchamp, chief market analyst at IG.

“Once again the Dow has crossed above 31,000, while in Europe the Dax becomes the latest market to clock up a big round number with its move above 14,000 for the first time.”

The main implication of a Democratic sweep in the US is a “substantially larger US stimulus package once president-elect Biden comes to office, and giving further support to the reflation trade,” added Deutsche bank in an analyst note.

READ MORE: Bitcoin hits new high above $39,000 as crypto market passes $1tn

The results of Georgia’s Senate race also led to a substantial selloff in US Treasuries on Wednesday, with 10-year yields up 8.1 basis points to 1.036%.

The election certification process, which is normally a straight forward, ceremonial event, was interrupted by objections from Republican lawmakers to Biden’s win.

Donald Trump was suspended from Twitter and Facebook after tweeting to supporters who attacked the US Capitol.

A police officer is dragged in a crowd of pro-Trump protesters during a clash at a rally to contest the certification of the 2020 US presidential election results. Photo: Shannon Stapleton/Reuters
A police officer is dragged in a crowd of pro-Trump protesters during a clash at a rally to contest the certification of the 2020 US presidential election results. Photo: Shannon Stapleton/Reuters

He said “I love you” on social media to protesters before calling on them to go home. He also repeated false claims about election fraud.

Meanwhile, COVID-19 cases in the UK reached another record high on Wednesday with cases over 62,000, in addition to more than 1,000 daily deaths for the first time since April. New restrictions have also been announced in Ireland, with most students being kept out of school until at least the end of January and non-essential construction projects taking a break.

On Wednesday, the Moderna (MRNA) vaccine won approval in the EU, as leaders face strong pressure to speed up their vaccination programme to be more in line with the US and the UK.

Finally, Bitcoin (BTC-USD) continued its relentless march higher, breaking through the $37,000 (£27,000), $38,000, and $39,000 marks for the first time ever on Thursday,

Asian markets were largely in positive territory as they focused on the global economic recovery. While Japan’s Nikkei (^N225) gained 1.6% at market close, the Hong Kong Hang Seng (^HSI) fell 0.5% on news that the Trump administration may ban investments in China’s Alibaba Group and Tencent. The Shanghai Composite (000001.SS) leapt 0.7% at market close. South Korea’s KOSPI (^KS11) headed higher 2.1%.

Watch: President-elect Joe Biden denounces Capitol Hill violence