The rally also comes after the United States General Services Administration (GSA) declared Biden the apparent winner in the United States election, paving the way for the formal transition of Donald Trump’s administration, ending weeks of uncertainty and late.
Nonetheless, Trump was quick to claim credit for the rally. “It’s a sacred number, 30,000. No one thought they would ever see it,” he said in an extremely brief press conference. “This is the 48th time that we have broken records under the Trump administration.”
He went on to congratulate his administration and “above all, the people of our country”.
Despite the surge in coronavirus infections around the world, the Dow Jones rose more than 450 points – around 1.5% – on Tuesday, closing above 30,000 for the first time.
Other major stock markets also rallied. Continuing a surge in recent weeks after large pharmaceutical companies reported promising developments in Covid vaccination trials, the FTSE 100 gained around 1.6%, rising 100 points to end the day at 6,432.
The UK’s main stock index recorded the best week since April earlier this month, after Pfizer / BioNTech said its Covid vaccine was 90% effective in protecting people against transmission of the virus in global trials .
The UK’s blue chip index remains over 1,000 points lower than at the start of the year, reflecting the scale of the UK Covid recession. In contrast, U.S. equity markets were supported by large gains for U.S. tech companies that profited from the shift to work and shopping online during the pandemic.
Vaccine updates from the University of Oxford and AstraZeneca have extended the rally further this week in hopes of a rapid economic recovery next year. However, the market value of the UK’s largest pharmaceutical company has fallen by more than £ 4 billion since Monday’s announcement, after reporting lower efficacy rates than other major vaccine producers. .
European markets also extended the rally on Tuesday, with the French CAC 40 and German DAX rising more than 1.2% on Tuesday. The price of oil surged amid speculation that a rapid economic recovery could fuel increased demand for energy around the world, with the price of U.S. oil hitting $ 45 a barrel for the first time since March.
Russ Mold, chief investment officer of Manchester-based stockbroker AJ Bell, said: “Oil is acting as an economic indicator and the commodity has been in tears since last month, increasing more than 20% in value then. as markets begin to become more optimistic about economic activity amid positive vaccine news. ”
The gains come as investors bet that lingering political uncertainty over the U.S. election outcome is gradually dissipating, after the GSA initiated the formal transition of power for Biden to take the presidency in January.
This contrasts sharply with Trump’s claims that a Biden victory would cause a stock market crash. With the hope of a smooth power exchange, a Covid vaccination program and a rapid economic rebound, the benchmark S&P 500 is also on track for its best November since 1980.
Analysts said there was growing hope that the next administration could tackle the Covid-19 pandemic, spur economic recovery and push through a new stimulus package to jumpstart growth in the region. largest economy in the world. Investors are also congratulated that Janet Yellen, the former head of the US Federal Reserve, is on the verge of becoming the next US Treasury Secretary.
Joshua Mahony, senior market analyst at financial trading firm IG, said: “With improving economic data, an ongoing vaccine and Biden’s push for more stimulus on the horizon, there is has many reasons to be optimistic for the coming month. “