Investing.com – European stocks rallied Wednesday as upbeat corporate earnings outweighed news that US President Donald Trump has ended talks on a new coronavirus aid package.
At 03:55 am ET (07:55 GMT), Germany's DAX was trading 0.1% higher, France's CAC 40 was up 0.1% and the UK's FTSE was up 0.1%.
US President Donald Trump on Tuesday ended talks with Democrats about a new stimulus package, tweeting that after winning the presidential election in November, “we will pass a major incentive bill targeting hardworking Americans and small businesses.”
While the news hit Wall Street hard on Tuesday evening, the European market took the news more calmly given that Trump is still looking for a stimulus package if he wins next month (or is assessing the possibility of “sweeping away” Democrats to ease adoption new package).
“There are several ways to get incentives,” said Rob Carnell, chief economist at ING Asia, as both candidates promise to do so. – But until the elections this will not happen. One way or another, we will get some kind of incentive, but not now, so we will walk a little on the spot. “
Some strong earnings reports boosted the upbeat tone in Europe.
Tesco shares surged 2.4% after the UK's largest supermarket chain reported a jump in first half profit by more than a quarter as its online sales doubled during the pandemic.
Dialog Semiconductor rose 3.5% after the company forecast higher-than-expected third-quarter revenue.
Meanwhile, the world's total coronavirus cases are approaching 39 million, with parts of Europe still being hit hard by the second wave of the virus, despite signs that the infection curve is flattening again in countries like Spain and Italy.
European Central Bank Governor Christine Lagarde said Tuesday that the new COVID-19 round risks delaying the eurozone economic recovery, and investors will be tuned in to her speech later on Wednesday, as pressure grows on central bank leaders to act if fiscal incentives will be late.
The latest report on industrial production in Germany was disappointing: it fell 0.2% in August, compared with an expected gain of 1.5%.
Oil prices fell on Wednesday as the likelihood of a new coronavirus response package declined, as well as a larger-than-expected increase in crude oil supplies.
The American Petroleum Institute (API) reported an increase in US oil inventories last week by 951,000 barrels from expected production of 831,000 barrels, raising doubts about a recovery in demand in the country, the world's largest oil consumer.
Investors are now awaiting data from the US Energy Information Administration (EIA), to be released later today.
US crude oil futures fell 1.3% to $ 40.15 a barrel, while the international benchmark Brent contract fell 0.9% to $ 42.25.
Gold futures fell 0.7% to trade at $ 1,896.35 an ounce, while EUR / USD rose 0.3% to hit 1.1767.
Written by Peter Nurse