Stocks rest after vaccines surge, dollar remains two and a half year low

LONDON (Reuters) – Global stocks hit record highs on Wednesday on hopes of a coronavirus vaccine and further economic stimulus in the United States, although enthusiasm for riskier assets left the dollar stuck at a 2-1 / 2 year low.

Britain on Wednesday became the first country in the world to approve the use of the Pfizer-BioNTech COVID-19 vaccine, saying it would start rolling it out early next week.

The two pharmaceutical companies and its competitor Moderna also requested emergency use approval from European regulators this week.

Top U.S. health officials have announced plans to start vaccinating Americans as early as mid-December, once regulatory approvals are in place. Deaths nationwide reached 2,295 on Monday, the highest toll in six months.

“Approval of a highly effective vaccine could mark the beginning of the end of the COVID-19 economic crisis and the start of a new equity bull market,” said Mike Bell, global market strategist at JP Morgan Asset Management.

“Scientists came to the rescue and delivered what investors were hoping for for Christmas.”

Despite the positive news, European stocks have struggled to add to their recent surge in early trading, but MSCI’s stock gauge across the world edged up 0.1% to keep it near a record high .

The dollar remained stuck at a 2 1/2 year low against the euro and a major currency index as investors sought higher risk currencies that fell during the early stages of the pandemic .

Eurozone government bond yields hit their highest level in three weeks at -0.51%.

Pfizer and BioNTech have said their vaccine could be launched in the European Union as early as this month, though a European regulator has clouded the schedule by announcing it will complete its review of their vaccine by December 29.

According to analysts at Deutsche Bank, the rapid approval and deployment of the vaccine in Britain “raises the prospect that life could return closer to normal early next year.”

BioNTech shares jumped more than 8% before slashing gains, although European stocks slipped 0.3% overall, falling below recent nine-month highs.

HOT OIL

Markets also hoped for more fiscal relief. Senior U.S. Senate Republican Mitch McConnell on Tuesday said Congress should include a new coronavirus stimulus in a $ 1.4 trillion spending bill aimed at avoiding government shutdown amid the pandemic .

US President-elect Joe Biden told the New York Times his priority is to secure a generous aid package through Congress even before he takes office in January.

US equity futures fell 0.23% after a closing record for Wall Street stocks.

The pound came under some pressure, however, with a senior EU diplomat saying the UK-EU trade deal after Brexit “is still in balance”.

The British pound fell more than 0.5% to $ 1.3354. Blue-chip UK stocks were flat.

In Asia, Chinese stocks recovered from early losses and rose 0.12%.

Tokyo shares were little changed after hitting a new 29-year high. Softbank Group shares fell 0.66% after Bloomberg News said the tech investor was cutting its options trading on companies such as Amazon.com Inc and Facebook Inc.

Oil prices have also been lifted by vaccine optimism, reversing earlier losses made after OPEC and its allies left markets in limbo by postponing a formal meeting to decide whether to increase production. in January.

Brent futures were up 0.15% to $ 47.49 per barrel, while U.S. crude fell 0.09% to $ 44.51 per barrel. Oil climbed nearly 30% last month.