Markets opened higher in Europe on Monday after a mixed day of trading in Asia.
A resurgence of coronavirus outbreaks has prompted some countries to turn to stricter precautions to curb a new wave of the pandemic.
Austria entered a nationwide lockdown early Monday in a desperate effort to contain the spiraling infections. The country’s chancellor, Alexander Schallenberg, announced last week that Austria would introduce a vaccination mandate from February 1.
Tens of thousands of people marched in Brussels on Sunday to protest against the tightening of COVID-19 restrictions imposed by the Belgian government.
The World Health Organization said last week that Europe is currently the hotspot of the pandemic, the only region in which deaths from COVID-19 are on the rise.
Still, the markets seemed to have a good start to the week. The German DAX rose 0.1% to 29,774.11 and the CAC 40 in Paris gained 0.3% to 7,130.80. Britain’s FTSE 100 gained 0.4% to 7,251.02.
US futures also gave a bullish start, with both the Dow Jones Industrial Average and S&P 500 contracts rising 0.3%.
On Wall Street on Friday, the Nasdaq composite gained 0.4%, while the S&P 500 lost 0.1%. The Dow Jones fell 0.8%. The Russell 2000 Index lost 0.9% to 2,343.16.
Investors are waiting to see if President Joe Biden decides to keep Jerome Powell at the helm of the Fed.
Biden is expected to announce in a few days who he will choose for the most powerful economic position in the country. Many Fed watchers expect Powell to be offered a second term, although Lael Brainard, a member of the Fed’s Board of Governors, has established himself as a top alternative.
The move could have a huge impact given the central role the Fed plays in shaping the future direction of the world’s largest economy.
In Asia on Monday, the Shanghai Composite Index gained 0.6% to 3,582.08 while the Hang Seng in Hong Kong lost 0.4% to 24,951.34.
South Korea’s Kospi jumped 1.4% to 3,013.25 as shares of the country’s largest company, Samsung Electronics, jumped 5.2%.
Tokyo’s Nikkei 225 recovered from earlier losses, rising 0.1% to 29,774.11. In Australia, the S & P / ASX 500 lost 0.6% to 7,353.10.
Indian Sensex fell 2.5%.
Reports that Chinese central bank advisers were pointing to risks of inflation and slow growth leading to “near stagflation” signaled the conflicting pressures Beijing is facing.
Controls on home loans, new waves of COVID-19 epidemics, and strict policies to combat them and skyrocketing prices are all adding to China’s political challenges, Nomura’s Ting Lu said in a report.
“A series of memos and political reports show that Beijing is increasingly concerned about slowing growth and has started to take steps to change its political stance to prevent growth from falling further,” he said. Ting said.
Stocks generally gained ground as companies reported better-than-expected earnings for the past quarter.
Yet most face higher raw material costs and supply chain issues that could reduce their future profits. Consumers have so far absorbed the higher prices, but analysts fear they will start saving if the higher prices persist for too long.
“Stock markets continue to trade at or near record highs in the United States, and who can blame them? US data remains strong although the noise of inflation escalates day by day, ”Oanda’s Jeffrey Halley said in a comment.
The situation is pushing the Federal Reserve to act more quickly to curb its ultra-low interest rate policies in order to combat rising prices. Bank of America analysts on Friday predicted that the Fed will likely start raising its benchmark interest rate in the second quarter of 2022, two quarters earlier than expected.
In other exchanges, the US benchmark crude added 30 cents to $ 76.24 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the basis of international prices, added 25 cents to $ 79.14 a barrel.
The US dollar climbed to 114.08 Japanese yen from 113.96 yen on Friday. The euro slipped to $ 1.1284 from $ 1.1289.