European Stocks Edge Higher As ECB Meets

European stock markets' bounce from Joe Biden taking office as US president lost steam Thursday

London, (UrduPoint / Pakistan Point News - 21st Jan, 2021 ):European stock markets' bounce from Joe Biden taking office as US president lost steam Thursday.

Attention switched to the European Central Bank (ECB), which met to take stock of its monetary stimulus efforts as more infectious strains of the coronavirus and stricter shutdowns cloud the eurozone's economic outlook.

The euro hit a six-month low versus sterling, with the British currency buoyed by the UK's early vaccine rollout, analysts said.

The stronger pound, which also hit a 2.5-year high versus the dollar, weighed on London's benchmark FTSE 100 index featuring multinationals earning in the US unit.

But the Europe's single currency gained ground against the dollar, after ECB chief Christine Lagarde appeared to "shrug off" the euro's rise during a press briefing, according to Matthew Weller at Gain Capital.

"On the strength of the euro, let me tell you that we are monitoring very carefully exchange rates," Lagarde told reporters.

A stronger euro makes imports cheaper, keeping a lid on consumer prices and inflation, while exports become less competitive, hurting growth prospects.

Asian stock markets made solid gains Thursday, as Biden prepared to unveil plans on tackling the coronavirus crisis.

On Wednesday, he signed a flurry of executive orders, starting with rejoining the 2015 Paris climate accord.

The orders included keeping the United States in the World Health Organization, a move observers say will help in the fight against Covid-19.

As trading got under way on Wall Street, the Dow Jones Industrial Average was essentially unchanged even as investors mulled official data that showed strength in the US housing market.

In Europe, ECB policymakers left key interest rates on hold and took no fresh action after ramping up their pandemic support last month.

The Bank of Japan revised its growth outlook upwards for the next two years meanwhile, and maintained its ultra-loose monetary policy while noting it was hard to establish clear forecasts owing to the pandemic.

If the ECB and Bank of Japan didn't take any action this month analysts expect they may still need to do so before the pandemic is over.

"Central banks may have a little more to do yet if we're going to see the turbo charged recovery we're hoping for," Oanda trading group analyst Craig Erlam told AFP.

Hong Kong's stock market closed slightly lower on profit-taking after five days of gains, having earlier in the day breached 30,000 points for the first time since April 2019.

Mumbai topped 50,000 points for the first time, meanwhile.

"The consensus view now (is) that... Biden's early focus will be more on growth than tax hikes," said Axi strategist Stephen Innes.

"The market is also seeing through longer lockdowns on the premise that Covid vaccinations will lead us out of the pandemic quickly." - Key figures around 1440 GMT - London - FTSE 100: UP 0.2 percent at 6,753.25 points Frankfurt - DAX 30: UP 0.2 percent at 13,948.81 Paris - CAC 40: DOWN 0.2 percent at 5,618.68 EURO STOXX 50: UP 0.2 percent at 3,632.85 New York - Dow: FLAT at 31,191.75 Tokyo - Nikkei 225: UP 0.8 percent at 28,756.86 (close) Hong Kong - Hang Seng: DOWN 0.1 percent at 29,927.76 (close) Shanghai - Composite: UP 1.1 percent at 3,621.26 (close) Euro/dollar: UP at $1.2138 from $1.2104 at 2150 GMT Dollar/yen: UP at 103.62 yen from 103.53 yen Pound/dollar: UP at $1.3713 from $1.3657 Euro/pound: DOWN at 88.52 pence from 88.64 penceWest Texas Intermediate: FLAT at $53.30 per barrelBrent North Sea crude: DOWN less than 0.1 percent at $56.04.