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LONDON MARKET EARLY CALL: Higher Call On Hopes For Further US Stimulus

Thu, 14th Jan 2021 07:01

(Alliance News) - Stock prices in London are seen opening higher on Thursday on hopes for fresh US financial support under the incoming Biden administration, even as Congress took the unprecedented step of impeaching the outgoing president for a second time.

IG futures indicate the FTSE 100 index is to open 22.78 points higher at 6,768.30. The blue-chip index closed down 8.59 points, or 0.1%, at 6,745.52 on Wednesday.

President-elect Joe Biden on Thursday will unveil his plan to revive the US economy, as evidence mounts that its recovery from the coronavirus pandemic is flagging despite trillions of dollars in government spending.

With his fellow Democrats narrowly controlling both houses of Congress, Biden appears to have a good shot at passing a third massive rescue package that could include everything from another round of stimulus payments to tax hikes on the rich to an increase in the minimum wage.

"We need more direct relief flowing to families [and] small businesses, including finishing the job of getting people the USD2,000 in relief," Biden said last week, referring to the last package that provided payments of USD600 in direct payments.

The funds could help spark a recovery that appears to be buckling under the weight of the nationwide surge in Covid-19 cases.

"Stocks continue to rise as the compelling picture for the US economic recovery will continue to benefit from US government fiscal support," said Axi's Stephen Innes.

Meanwhile, Donald Trump became the first US president in history to be impeached twice when the House of Representatives voted Wednesday to charge him with inciting last week's mob attack on Congress.

The Senate will not hold a trial before January 20, when Biden assumes the presidency, meaning the real estate tycoon will escape the risk of being forced to leave early.

Powerful Republican Senate leader Mitch McConnell has made clear there is no time before Trump's January 20 exit to hold an impeachment trial, given that the Senate is in recess until January 19. However, he said Wednesday that he was open to the possibility of voting to convict Trump in a trial, which could still be held after Biden takes over.

In the US on Wednesday, Wall Street ended mostly higher, with the Dow Jones Industrial Average flat, S&P 500 up 0.2% and Nasdaq Composite up 0.4%.

The pound was quoted at USD1.3631 on Thursday morning, flat from USD1.3629 at the London equities close Wednesday.

The euro was priced USD1.2152, lower from USD1.2158. Against the yen, the dollar was trading at JPY104.05, up from JPY103.92.

Brent oil was quoted at USD55.95 a barrel Thursday morning, down from USD56.21 a barrel at the London equities close Wednesday. Gold was quoted at USD1,841.26 an ounce, down from USD1,857.59.

The Japanese Nikkei 225 index closed up 0.9%. In China, the Shanghai Composite is down 0.6%, while the Hang Seng index in Hong Kong is up 0.6%.

China's trade surplus with the US widened last year despite a partial trade deal requiring Beijing to boost purchases, official figures showed.

China's customs administration data showed the surplus climbed 7.1% to USD316.9 billion, with outbound shipments boosted by sales of electronics goods and protective gear. Although the world's second-largest economy sufered a record contraction in the first quarter of last year as the coronavirus brought activity to a halt, it soon recovered as lockdowns in the country were eased and medical exports soared.

For the whole of 2020, China's exports rose 3.6%, although imports shrank 1.1%.

The UK corporate calendar for Thursday has trading statements from grocer Tesco, home furnishings retailer Dunelm, housebuilder Taylor Wimpey and Premier Inn owner Whitbread.

In Thursday's economic calendar are Irish inflation at 1100 GMT and minutes from the European Central Bank's last meeting at 1230 GMT. US continuing jobless claims are due at 1330 GMT, and US Federal Reserve Chair Jerome Powell speaks at 1730 GMT.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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