Global stock markets climb on bright data, vaccine hopes

Globe with digital tablet, laptop and smartphone showing international markets.
Globe with digital tablet, laptop and smartphone showing international markets.
Andrew Brookes

World stock markets rallied Monday, as bright economic data further boosted investor sentiment following last week's breakthrough coronavirus vaccine news.

Equities also bounded higher after US President-elect Joe Biden's team pledged not to impose an economically damaging nationwide lockdown to contain the virus, which has now infected more than 11 million Americans

In addition, traders cheered the signing of the world's biggest free-trade deal by 15 Asia-Pacific countries - including Japan and China - that covers about a third of the world's GDP.

"Global stocks have received further tailwind on Monday, buoyed by investor confidence in economic recovery and building on the initial burst early last week on the vaccine announcement," said Sun Global Investments head Mihir Kapadia.

"The recent growth points towards the fact that Asia is now well and truly on the path to recovery, with China in particular, showing great resilience as Beijing revealed its factory output had risen faster than expected. This has set Europe higher too."

Europe's main stock markets kicked off the week on a positive note, with London up 0.7% in late morning deals, while Frankfurt added 0.5% and Paris rose 1.1%.

The dollar dipped against the euro and yen, while oil prices rebounded strongly to extend last week's vaccine-inspired gains.

"European bourses head out of the blocks on the front foot as vaccine optimism and encouraging data from China and Japan overshadow concerns over rising Covid-19 cases," agreed City Index analyst Fiona Cincotta.

In Asia, Tokyo led the gains, jumping more than 2% on news that the world's number three economy had surged out of recession in the third quarter, expanding a forecast-beating five percent thanks to a pick-up in domestic demand and exports.

However, while there is growing expectation a treatment will be available in the new year, gains were nevertheless tempered by worries about a spike in the disease in the US and across Europe.

After a painful October, equities have enjoyed a huge bounce since Biden's election win, which was followed by news that Pfizer and BioNTech's vaccine candidate had proved 90% effective - lifting hopes the world can soon begin returning to normal.

Monday's market advances came after another strong performance on Wall Street last week, where the S&P 500 finished at a record high. All three main New York indexes were up in futures trading.

Over the weekend, fifteen Asia-Pacific countries on Sunday signed the world's biggest free trade deal, seen as a huge coup for China in extending its influence.

The Regional Comprehensive Economic Partnership (RCEP) includes 10 Southeast Asian economies along with China, Japan, South Korea, New Zealand and Australia.

However, China-US tensions were back on the radar after Axios reported that Donald Trump was considering a range of new tough measures against Beijing in the last few weeks of his presidency.

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