Global stocks boosted by vaccine rollout

NEW YORK: Wall Street opened higher on Monday as the start of the COVID-19 vaccine rollout in the US cheered investors, while Britain’s pound jumped on a last-gasp extension to Brexit talks.

News that London and Brussels had agreed to “go the extra mile” to try to salvage a Brexit trade agreement set an optimistic tone, boosting Europe’s main share index and lifting the euro against the struggling dollar.

“We are going to give every chance to this agreement … which is still possible,” the EU’s Brexit negotiator, Michel Barnier, told reporters before updating envoys from the 27 EU countries on Monday. Progress on coronavirus vaccines boosted sentiment, with the first doses being shipped across the US as part of an effort to inoculate more than 100 million people by the end of March.

That was despite second waves of the pandemic forcing Germany, the Netherlands and possibly London back into stricter lockdowns. Cases surged in Japan, South Korea and parts of the US as well. “The vaccine has and will likely continue to provide a tailwind to the market that is allowing investors to look beyond record case levels, hospitalizations and deaths,” analysts at JPMorgan said in a note.

On Wall Street, the Dow Jones Industrial Average rose 0.76 percent, the S&P 500 gained 0.86 percent and the Nasdaq Composite added 1.31 percent.

MSCI’s benchmark for global equity markets rose 0.65 percent to 633.94, while its index for emerging markets stocks fell 0.5 percent. Europe’s broad FTSEurofirst 300 index added 0.61 percent to 1,517.92.

Japan’s Nikkei rose 0.3 percent as a survey showed the mood among Japanese businesses improved in the December quarter.

In currencies, Sterling was the day’s big mover, gaining on both the euro and the dollar as what last week had appeared to be evaporating prospects of a Brexit agreement came back to life.

Sterling was trading at $1.3335, up 0.85 percent after earlier climbing 1.2 percent to $1.3423.

“Even in the face of amped-up rhetoric, we continue to think a deal is the most plausible outcome,” said AXA Group chief economist Gilles Moec.

The dollar index fell 0.025 percent, with the euro up 0.16 percent to $1.213.

The Japanese yen strengthened 0.01 percent versus the greenback at 103.99 per dollar.

The Federal Reserve’s policy meeting on Dec. 15-16 will be an added hurdle for the dollar. The market is assuming the central bank will merely refine its forward guidance on policy rather than buying more bonds or “twisting” its portfolio to add longer-dated debt.