Home finance Stock markets soar as City traders anticipate Joe Biden win

Stock markets soar as City traders anticipate Joe Biden win


Share prices in the City registered their biggest daily gain in two months amid investor hopes that a Joe Biden victory in the US presidential election would result in a major new stimulus package.

London’s leading stock market index, the FTSE 100, closed up by 131 points, or 2.33%, at 5786 as the gloomy mood of last week faded.

A rally in share prices began overnight in the Asia-Pacific region and moved on to Europe where all the big bourses posted gains. All three of the leading barometers of US share prices – the Dow Jones Industrial Average, the S&P 500 and the Nasdaq – were showing solid gains on the morning of election day in the US.

Despite the imminent start of a new nationwide lockdown in England on Thursday, the rise in share prices reflected confidence that Biden would defeat Donald Trump as part of a Democrat clean sweep of the presidency and both houses of Congress.

The City also expects the Bank of England to support activity with an announcement on Thursday of at least £100bn of fresh money creation through its quantitative easing programme.

Tougher lockdown measures announced by a number of European economies together with record daily infections in the US led to the sharpest monthly sell-off in equities in October since March.

But despite polls suggesting a tight presidential race in some of the key swing states, markets were anticipating a clear win for Biden.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

“It’s quite surprising when you’ve got such a massive event-driven week, you can see a little bit of apprehension at the start of the week, but [this rally] has been quite the opposite,” said Craig Erlam, a senior market analyst at Oanda in London.

READ  Coronavirus: Gas, electric, petrol and clothing prices plunge, sending inflation to four-year low

Erlam added that a smooth US presidential election, a vaccine for Covid-19 and a Brexit deal could all be positive for financial markets over the coming weeks.

Fiona Cincotta, an analyst at Gain Capital, said: “Should Joe Biden manage to win the race, a blue wave, which includes control of the Senate, is needed for the markets to really get excited about stimulus. A Republican-controlled Senate indicates more gridlock to come and the markets will need to drastically scale back stimulus expectations.”



Please enter your comment!
Please enter your name here