Europe Stocks Post Best Winning Streak Since April on Biden Odds
(Bloomberg) -- European equities rose for a fifth day, their longest advance since April, as Joe Biden stood on the brink of claiming the U.S. presidency, with a handful of states expecting to complete vote counts.
The Stoxx Europe 600 Index added 1.1% at the close of trading, led by gains in media shares. The FTSE 100 Index lagged European peers as the pound climbed after the Bank of England expanded its bond-buying program.
The rise in European stocks, following a slump in October, came as the U.S. presidential battlefield narrowed to a smaller number of states, even as Republicans opened legal fights to stop counting in some of them. Biden needs a win in one more state -- Pennsylvania, Georgia, Nevada or North Carolina -- provided that other race calls stand.
“The positive equity market reaction reflects some reduction in uncertainty, as investors now know more about the likely outcome and potential policies,” said Mark Haefele, chief investment officer at UBS Global Wealth Management. “Downside risks remain in a contested election outcome, but the key drivers for risk assets are still in place in our view: the economic recovery from the global pandemic, widespread availability of a vaccine by 2Q21, and continued aggressive policy support from central banks.”
Carmakers recovered some ground after underperforming on Wednesday, while banks slighly lagged behind the broader market. Societe Generale SA climbed after closing out a bumper quarter for European investment banks, while Commerzbank AG tumbled after warning that bad loans could rise depending on the impact of Covid-19.
Meanwhile, the FTSE 100 rose 0.4% as the central bank boosted its stimulus program by more than expected on the same day that a fresh national lockdown began in England.
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