BUSINESS European stock markets surge on vaccine hopes

BUSINESS

European stock markets surge on vaccine hopes

AFP

19:44, August 24, 2020

European stock markets surged Monday on hopes of a coronavirus vaccine, while the dollar waned on continued deadlock over a new US stimulus deal, dealers said.

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File photo: Agencies

Looking ahead to a key meeting of central bankers this week, traders sent London's benchmark rallying 2.0 percent and major eurozone indices were almost 2.5-percent higher approaching the half-way stage.  

American authorities on Sunday announced that doctors could use blood plasma from recovered coronavirus patients as a treatment against the disease that has killed more than 176,000 in the US.

The move by the Food and Drug Administration comes as President Donald Trump faces intense pressure to curb the contagion that has hobbled the world's largest economy and clouded his once-promising prospects for re-election in November.

"European markets have kicked off the week in style, with the FDA's decision to approve the convalescent plasma coronavirus treatment raising hopes that we could see a vaccine fast-tracked before long," said Joshua Mahony, senior market analyst at IG trading group.

Hong Kong's main stock index meanwhile led gains across Asia, rallying 1.7 percent with traders cheered by a pledge from China's banking regulator that it would continue to back the city as a financial hub after concerns were raised following the imposition of a new security law last month.

Investors will this week be keeping an eye also on a virtual gathering of central bankers at Jackson Hole, Wyoming, for monetary policy guidance after they have already provided already a wall of cash to support the global economy during the pandemic.

The main attraction is a speech by Federal Reserve chief Jerome Powell that is slated to take place on Thursday.

"More clarity will no doubt be sought via this week's Jackson Hole symposium," said Ben Emons, of Medley Global Advisors.

Traders are additionally keeping tabs on Washington, where US lawmakers are struggling to reach an agreement on a fresh stimulus package for the American economy.

"Democrats and Republicans are still very far (from)  reaching a deal, and this means no further immediate aid in terms of fiscal policy," said Naeem Aslam, chief market analyst at Avatrade.

"Investors will like to know how the Fed will use language to make politicians understand in Washington about the importance of another stimulus package."

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