FTSE at nine-month high on US stimulus hopes and OPEC+ deal

Tom Belger
·Finance and policy reporter
·2-min read
US Senate Democratic leader Chuck Schumer and Speaker of the House of Representatives Nancy Pelosi. Photo: Hannah McKay/Reuters
US Senate Democratic leader Chuck Schumer and Speaker of the House of Representatives Nancy Pelosi. Photo: Hannah McKay/Reuters

The FTSE 100 (^FTSE) was trading at a nine-month high on Friday, as an OPEC+ deal lifted energy stocks and US lawmakers moved closer to agreeing a stimulus package.

Britain’s top 100 listed companies gained 0.9% on the final trading day of the week, while the Europe-wide Stoxx 600 (^STOXX) benchmark gained 0.6% and France’s CAC 40 (^FCHI) was up 0.4%. Germany’s DAX (^GDAXI) was up 0.2%.

Oil prices headed higher and European energy stocks made gains after the Organization of Petroleum Exporting Countries and allies (OPEC+) agreed to only a limited increase in production.

UK-listed energy giants BP (BP.L) jumped 3% and Royal Dutch Shell (RDSB.L) both jumped 2.8%, marking some of the biggest risers on the FTSE. European oil and gas firms on the Stoxx 600 index saw similar gains.

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European stocks gained further momentum from weaker-than-expected US jobs data, as investors bet on greater pressure for fiscal stimulus.

It comes after House speaker Nancy Pelosi and Senate Democrat leader Chuck Schumer said they “could come to an agreement” based on a $908bn (£674bn) plan devised by a bipartisan group of lawmakers. The Democrats had been pushing for a $2.4tn plan before the presidential election.

“Momentum continues to gather on the bipartisan stimulus deal that the Democratic leadership supported yesterday,” wrote Deutsche Bank analysts in a note.

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Republican senator Mitt Romney, one of those behind the proposal, said they were receiving “more and more support from Republicans and Democrats.”

But the latest vaccine news weighed on market sentiment. Pfizer (PFE) confirmed to the Wall Street Journal it was only planning to distribute half the amount of coronavirus vaccines it had initially planned this year because of issues sourcing raw materials.

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The drug-maker, along with its German partner BioNTech (BNTX), plans to ship 50 million vaccines by year-end, as opposed to the 100 million it previously expected.

Overnight in Asia, the news knocked the Nikkei (^N225) in Japan off a 29-year high, with the index closing down 0.2%.

The Hong Kong Hang Seng (^HSI) gained 0.2%, while the Shanghai Composite (000001.SS) rose 0.1%, while the Shenzen Component (399001.SZ) 0.4%.