European markets traded higher Friday as global investors anticipate that a Democratic-controlled U.S. government will lead to greater fiscal support.
The pan-European Stoxx 600 climbed 0.6% in early trade, with tech stocks jumping 2.6% to lead gains while banks bucked the trend to slide 0.5%. Germany’s DAX notched a new record high on Friday morning.
European stocks received a mostly strong handover from Asia-Pacific, with South Korea’s Kospi jumping 2.8% to lead gains. Mainland Chinese shares bucked the trend to slip lower after the New York Stock Exchange’s announcement that it will delist the U.S.-listed stocks of those three Chinese telecommunication giants to comply with an executive order signed by President Donald Trump last year.
Shares of South Korean automaker Hyundai Motor soared 22.82% following a local media report of a deal between the firm and tech giant Apple on developing electric vehicles and batteries.
Stateside, Wall Street surged to new record highs on Thursday as the U.S. Congress confirmed President-elect Joe Biden’s election victory, a day after supporters of incumbent President Donald Trump stormed the U.S. Capitol building.
Trump admitted in his own words for the first time on Thursday that the Biden administration will take charge on Jan. 20, having challenged the outcome of the election since Nov. 3. However, he continues to face calls for removal and impeachment following the siege on the Capitol, which left four people dead and drew global condemnation.
Markets have also reacted positively to Democrats winning two Georgia Senate runoffs, thereby securing control of the upper chamber and bolstering Biden’s chances of advancing his legislative agenda. This is expected to include heavier spending and borrowing to support the economic recovery from the coronavirus pandemic.
More positive news on the Covid-19 vaccine front may also boost sentiment Friday, as a laboratory study indicated that the Pfizer and BioNTech vaccine is effective against the new, highly-transmissible mutations of the virus found in the U.K. and South Africa.
Back in Europe, Credit Suisse on Friday projected a net loss for the fourth quarter on the back of an $850 million provision for a long-running dispute in the U.S. over a residential mortgage-backed security. The Swiss lender’s shares dropped 3% in early trade.
On the data front, November’s euro zone unemployment rate is due at 10 a.m. London time.
In terms of individual share price action, German semiconductor company Infineon Technologies climbed more than 7% in early trade after peer Samsung Electronics offered an upbeat outlook.
Sodexo shares gained 6.8% after the French catering group reported stronger-than-expected quarterly results and upgraded its outlook.
At the bottom of the European blue chip index, Anglo-German travel operator Tui plunged more than 15% after announcing a 545 million euro ($666.3 million) capital raise to shore up its finances.
