Written by Norman Isaac Mwambazi

Stocks mixed as bleak UK data offsets US vaccine, stimulus package hopes

European stocks were mixed today, Wednesday, February 3, 2021, as UK economic data showed firms’ output contracting, but news on …

European stocks were mixed today, Wednesday, February 3, 2021, as UK economic data showed firms’ output contracting, but news on US vaccine, stimulus, and earnings boosted global sentiment.

In Europe, Germany’s DAX rose 0.3%, France’s CAC 40 rose slightly by 0.1%, and the Europe-wide Stoxx 600 rose 0.6%. Inflation data was in focus, with EU figures showing Eurozone price growth at the fastest in more than a year.

The FTSE opened higher but was trading 0.2% lower by mid-afternoon in London, after purchasing managers’ index (PMI) data for the dominant services sector showed the sharpest output decline in eight months.

Stronger hopes of the recovery of the U.S. economy boosted the mood on global markets, with many investors’ worries easing over the fallout of the Reddit-fuelled short squeeze that dominated market news last week.

The White House confirmed plans to hike weekly vaccine supplies to 11.5 million doses, distributing doses directly to up to 40,000 pharmacies s new president Joe Biden strives to achieve his goal of administering 100 million vaccine doses in his first 100 days in office.

Congress also moved a step closer to signing off Biden’s proposed $1.9 trillion stimulus package in spite of Republican opposition yesterday. The House and the Senate both voted to start a budget resolution debate, with the Democrats’ majorities proving crucial as politicians voted on party lines.

According to Yahoo Finance, a separate, more detailed relief bill will have to be drafted and voted on for the stimulus package to become law, with final votes unlikely until March.

Yesterday, e-commerce giant Amazon and search giant Google’s parent company Alphabet reported their Q4 FY2020 earnings with the former breaking records and the latter’s advertising revenue surging. These reports saw both stocks jump in pre-market trading, and boosted wider stock indices.

U.S. futures had been trading higher after strong gains on Monday and Tuesday, but stocks were more mixed at the open. The Dow Jones index dipped 0.2%, but the benchmark S&P 500 edged 0.1% higher and the tech-heavy Nasdaq rose 0.4%.

Vaccine developments further boosted sentiment.

Senior Market Analyst at top forex provider IG, Joshua Mahony commented bout the COVID-19 vaccine’s effect on the stocks:

“Another bout of good news on the vaccine front has helped lift stocks, with the recent volatility being left behind for now. News that the AstraZeneca vaccine appears to slow the transmission of the virus has been heralded as a significant breakthrough.”

Most Asian stock indices had also risen overnight. Japan’s Nikkei was up 1% and the Kospi in South Korea rose 1.1%. However, in Hong Kong and China, the Hang Seng Index and the Shanghai Composite Index lost 0.2% and 0.5% respectively.