City traders fear that Biden’s victory will make the stock market soar

Share prices in the city have registered their biggest daily gains in two months. Investors expect Joe Biden’s victory in the US presidential election to lead to a major new stimulus package.

London’s flagship stock market index, the FTSE 100, lost 131 points or 2.33% to close at 5786, the depressed mood of the previous week.

A rally in share prices began overnight in the Asia-Pacific and moved to Europe where all the big stocks made a profit. All three of America’s major barometer share prices – the Dow Jones Industrial Average, S&P 500 and Nasdaq – were showing solid gains on the morning of election day in the US.

Despite the imminent start of a new nationwide lockout in England on Thursday, the rise in share prices reflected confidence that Biden would defeat Donald Trump as part of the presidential Democratic clean sweep and both houses of Congress.

The city also expects the Bank of England to support the activity with the announcement of the creation of at least £ 100 billion of fresh money through its quantitative easing program.

Tough lockdown measures announced by many European economies with record daily transitions in the US set off the fastest monthly sales in equities since March in October.

But despite elections suggesting a tight presidential race in some key swing states, the markets were hoping for a clear victory for Biden.

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“When you have found such a largely event-driven week, you are quite surprised, you may see a little apprehension at the beginning of the week, but [this rally] This is the complete opposite, said Craig Erlam, a senior market analyst at Onda, London.

Erlam said that the US presidential election, a vaccine for Kovid-19 and the Brexit deal could be positive for the financial markets in the coming weeks.

Fiona Cincotta, an analyst at Gain Capital, said: “Joe Biden should manage to win the race, a blue wave, which includes control of the Senate, is necessary for the market to be really excited about the excitement . A Republican-controlled Senate indicates more gridlock to come and markets will have to meet expectations of greater incentives. “


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