Biden bounce sends global markets racing

STOCK markets around the world gave a warm welcome to Joe Biden today, believing that the next US president will bring the stability needed for shares to flourish.

Markets also seemed pleased that Congress will be split, which should rein in his more spendthrift tendencies and ensure that interest rates can stay low for longer.

That should also favour equities as investors go in search of yields they cannot get from bank accounts or government bonds.

The Biden bounce saw the FTSE 100 race past 6000 for the first time since August. For context, it was well over 7300 a year ago.  

That jump was in response to a 2% rise in Japan’s Nikkei, which hit its highest level in 29 years. The Shanghai Composite also rose 2% and European markets followed suit.

Later, the FTSE was up 81 points at 5991. The question of concern for the City remains Brexit and whether Biden will put, as threatened, Britain to back of the queue on trade.

Susannah Streeter, markets analyst, at Hargreaves Lansdown, said: “An incoming Biden administration is certainly not going to offer an easy path to a trade deal between UK and the US and could even determine the shape of relations between Britain and the EU. Joe Biden has already expressed disapproval of proposals for the UK to potentially break international law on certain aspects of the withdrawal agreement.”

Housebuilders were the big UK winners today, with Taylor Wimpey up 14p to 138p, Persimmon up 117p to 2739p and Barratt up 24p to 566p.

Only two FTSE shares fell – Auto Trader and AstraZeneca, and even them only slightly.

Last week US shares had their best five-day run since April – the S%P finished the week up more than 7%.

There is expected to be more to follow. Armin Peter, head of European debt at UBS, said: “America has voted, Biden wins and the market likes it.”