Global markets are buoyant as debate over US stimulus plans looms

LONDON (Reuters) – Global stock markets gained for a second day on Tuesday, boosted by heightened optimism about the economic recovery and global recovery, as retail investors pulled back from GameStop and their renewed interest in the ‘money.

Positive momentum from Asia to Europe, with the pan-European STOXX 600 increasing by 0.9%.

BP shares fell 3.8% after plunging to a loss of $ 5.7 billion last year, its first in a decade.

The MSCI World Stock Index, which tracks equities from 49 countries, rallied 0.4% after posting its best day in three months on Monday.

The MSCI index of Asia-Pacific stocks outside Japan rose 1.5%, as China’s benchmark CSI300 climbed 1.5%, helping to ease concerns over liquidity tightness and declining cases of new coronavirus infections. Japan’s Nikkei 225 added 1%.

E-mini futures for the S&P 500 index rose 0.8%.

Markets were vibrant ahead of negotiations Tuesday between US President Joe Biden and Republican senators on a new COVID support bill. The GOP’s $ 618 billion stimulus package released Monday morning was about a third the size of the President’s proposal. Leading Democrats on Monday tabled a joint $ 1.9 trillion budget measure in an attempt to bypass Republicans.

“If you have the capacity to have a stimulus trade-off, it will be very favorable to financial assets in the medium term, because it means that you will have the capacity to have an economic recovery,” said François Savary, director of investments at Swiss Wealth Manager Prime Partners.

“The $ 1.9 trillion was set as a high bar of possibilities and as a way to enter into a negotiation for something that would be smaller and more efficient.”

The dollar hovered near a seven-week high, benefiting from a massive sell-off in the euro overnight after coronavirus lockdowns choked consumer spending in Germany and shorted hedging in overcrowded dollar sell positions.

The dollar index edged down 0.1% to 90.91.

Against the US dollar, the euro traded at $ 1.2078, just above an early December low of $ 1.2056 reached in the previous session.

The Australian dollar slashed gains after the country’s central bank said it would extend its quantitative easing program to buy $ 100 billion in additional bonds. The Aussie last traded at $ 0.7627, almost flat on the day.

The Turkish lira strengthened by more than 1%, prolonging a rally after the central bank promised strict policy for an extended period last week.

With global market sentiment remaining bullish on the US fiscal stimulus, core eurozone government bond yields edged up, benchmark 10-year German Bund yield About two basis points higher at -0.4980%.

Institutional investors are still digesting the retail frenzy that has boosted GameStop Corp and other so-called memes stocks over the past few sessions against their financial fundamentals, but have taken cautious steps to protect their positions.

GameStop’s Frankfurt-listed shares were down 30% from Monday’s close of 143 euros at the start of Tuesday’s session. It closed in the US markets at $ 225. [L4N2K81PJ]

Silver spot prices slipped 4.8% to $ 27.59 an ounce as investors locked in profits after the precious metal hit an almost eight-year high in the previous session, driven by retail investors.

Spot gold fell 0.6% on Tuesday to $ 1,847.51 an ounce.

Brent rose 1.1% to $ 56.95 a barrel. U.S. crude rose 1.2% to $ 54.22 as lower inventories and higher demand for fuel due to a massive snowstorm in the northeastern United States supported the prices.