BUSINESS European stocks, dollar slide awaiting US stimulus

BUSINESS

European stocks, dollar slide awaiting US stimulus

Xinhua

20:45, October 22, 2020

US and European stock markets slid and the dollar faltered Wednesday as upbeat talk in Washington on a new stimulus package amounted to little.

The pound climbed higher meanwhile thanks to hopes that Britain and the European Union will strike a post-Brexit trade deal despite renewed tensions.

Oil prices plunged by three percent or more, however, following the release of data that showed an increase in US stocks of gasoline (petrol), whereas analysts had expected a decrease.

"European equity markets are in the red... as traders are growing tired of the fact that US politicians have yet to strike a deal with respect to the stimulus package," noted David Madden, analyst at CMC Markets UK.

After months of talks, Democrats and the White House said they were closing the gap on their stimulus proposals, and House Speaker Nancy Pelosi said legislation was being drawn up.

President Donald Trump's administration sent three top officials to speak on three different TV networks Wednesday to tout what they called progress made toward a deal.

The White House has upped its offer to $1.9 trillion, which is still short of the Democrats' $2.2 trillion plan, but Trump has said he is willing to go higher.

But traders lost confidence that progress would be made by day's end and the national resurgence in Covid-19 cases didn't help matters, sending the Dow 0.4 percent lower at the close.

In Asia, the Tokyo stock market ended with a gain of 0.3 percent, while Hong Kong added 0.8 percent and the main stock index in Shanghai dipped following recent gains.

Elsewhere, coronavirus vaccine hopes were raised after US biotech firm Moderna said its candidate could be given approval for emergency use as early as December.

Besides the United States, the disease has flared up again across Europe, where many countries have been forced to introduce targeted lockdowns that have fanned fears for business survival and warnings of a possible double-dip recession.

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