Stock markets show resilience despite turmoil in Washington

Global markets are showing resilience after a day of violence rocked the US Capitol, with investors firmly focused on the prospect for more economic stimulus and the likelihood that calm will prevail as Joe Biden takes the presidency.

Ahead of the opening of Wall Street trading, S&P 500 futures were up 0.3 per cent and most stock benchmarks across Asia and Europe were in the green. The pan-European Stoxx 600 index was 0.35 per cent higher, while in Dublin, the Iseq was up 0.5 per cent. There was more pressure, however, on both the FTSE 100 and FTSE 250 in London.

Mr Biden was formally recognised by Congress as the next US president early Thursday, a day after demonstrators overpowered police and stormed through the Capitol building in a scene of unprecedented turmoil in Washington.

US president Donald Trump released a statement pledging "an orderly transition" after Congress certified the results. Despite the disruption, markets showed little sign of worry and trading throughout the day was normal.

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Bullish themes, such as the prospect for more US stimulus spending in a Democrat-controlled Congress and the vaccine rollout, have dominated investor attention.

“The market is confident that there will be an orderly transition of power,” said Christoph Rieger, head of fixed-rate strategy at Commerzbank AG.

"What matters more are the near-term prospects of a transition of power and more fiscal stimulus under a Democrat-led Senate. "

Federal Reserve

Rising Treasury yields have been a key market theme this week, with strategists debating how high rates could go. In minutes published Wednesday, Federal Reserve officials unanimously backed holding the pace of asset purchases steady when they met last month.

In a sign that traders are still willing to pile on risk, Bitcoin shot above $38,000 to another record high.

But shares of Twitter dropped 2.4 per cent in US pre-market trading after the platform suspended Mr Trump’s account. Tesla added 2.9 per cent as analysts at RBC upgraded the stock, saying they were “completely wrong” with their previously bearish views.

In Europe, sentiment was boosted by an unexpected rise in German factory orders pre-lockdown in November. British grocery chain Sainsbury’s rallied 3.6 per cent after seeing its strongest Christmas on record.

On the downside, Ryanair declined 1.8 per cent in London and 2.6 per cent in Dublin after the budget airline operator cut its full-year traffic forecast, citing new coronavirus restrictions.

– Bloomberg