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Stocks advance on hopes for virus treatment, EU deal

By AFP - Jul 11,2020 - Last updated at Jul 11,2020

The Fearless Girl statue stands facing the Charging Bull as tourists take photos in New York City (AFP file photo)

NEW YORK — US and European stocks advanced on Friday on optimism over the chances of an EU economic stimulus plan and fresh hopes for coronavirus treatments. 

Traders nonetheless continued to track rising virus infection rates and braced for next week's corporate earnings reports.

In New York, the tech-rich Nasdaq Composite Index rocketed to another record, while the Dow and S&P 500 also gained.

The London stock exchange was 0.8 per cent higher at the close, while Frankfurt added 1.2 per cent and Paris was up by 1 per cent.

Investors cheered remarks from the head of German biotech firm BioNTech to the Wall Street Journal that a vaccine candidate would be ready for regulatory review by the end of the year.

Analysts also pointed to a positive announcement from Gilead Sciences about clinical trials on remdesivir, the first drug shown to be relatively effective in treating COVID-19.

On Wall Street, airlines and hotel stocks rallied on Friday, along with petroleum producers — sectors hard-hit by social distancing protocols.

The prospect of a vaccine in the foreseeable future "is the kind of announcement that gives the market a bit of comfort that there is light at the end of this", said Quincy Krosby, chief market strategist at Prudential Financial.

On the downside in Asia however, Hong Kong stocks sank 1.8 per cent as a fresh outbreak in the city prompted authorities to reimpose measures including the closure of schools.

'Chop-fest' 

 

"It's basically been a chop-fest this week," noted markets.com analyst Neil Wilson.

Gold, after hitting a near nine-year high earlier this week, eased lower in late exchanges as markets advanced.

The markets have generally displayed a healthy resilience to the rapid spread of the disease around the world, with hopes for economic recovery, easing of lockdowns and government largesse providing crucial support.

"COVID-19 case numbers will need to be monitored but the market seems to have developed a degree of herd immunity to these, at least in terms of headline risk," Wilson remarked. 

In Brussels, EU Council president Charles Michel on Friday proposed setting up a 5 billion euro ($5.7 billion) reserve fund for unforeseen consequences of Brexit on bloc member states.

Analysts at the Dutch bank ING also noted that reticent EU members, not least the Netherlands, might "take steps towards a compromise on the EU recovery fund".

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