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COVID-19 treatment hopes send stock markets surging

·4-min read
Global stock markets had surged worldwide, including in New York

Global stock markets surged while Wall Street posted another record-setting day on Monday amid the unveiling of a new coronavirus treatment.

Oil prices also climbed as two storms homing in on the Gulf of Mexico shut down 80 percent of production in the region.

Following news the US Food and Drug Administration (FDA) on Sunday authorized use of an experimental COVID-19 treatment, the broad-based S&P 500 jumped 1.0 percent to end the session at 3,431.28.

The tech-rich Nasdaq Composite Index rose 0.6 percent to 11,379.72, its third consecutive high point, bringing the tally closer to 40 records for the year.

The new treatment involves using blood plasma from recovered coronavirus patients to fight the disease that has killed more than 176,000 in the United States and hobbled the world's largest economy.

The epidemic has put intense pressure on President Donald Trump as he fights for re-election in November.

Maris Ogg, portfolio manager at Tower Bridge Advisors, noted that good news on a treatment was counteracted by worrying reports about coronavirus patients becoming reinfected.

"COVID is still very much rattling people," she told AFP. "It will probably go on like this until we have a group of vaccines that people are confident in."

But while trading is quiet in late August, "We are slowly seeing the market broadening in terms of leadership, which is pretty healthy," she said.

European markets all closed higher on the news as well, with London's FTSE gaining 1.7 percent and the German Dax jumping 2.4 percent.

"Markets don't need much on the vaccine front to get excited. Any positive reports tend to get a big response," said OANDA analyst Craig Erlam.

Hong Kong's main stock index led gains across Asia, rallying 1.7 percent with traders cheered by a pledge from China's banking regulator that it would continue to back the city as a financial hub, after concerns were raised following the imposition of a new security law last month.

- Hurricanes in the Gulf -

Investors this week will be looking for "more clarity" on monetary policy from a virtual gathering of central bankers in Jackson Hole, Wyoming, Ben Emons of Medley Global Advisors said.

Federal Reserve chief Jerome Powell's speech Thursday remains a top attraction of the condensed event that also will feature Bank of England Governor Andrew Bailey.

Traders also are keeping tabs on Washington, where the White House and US lawmakers are struggling to reach an agreement on a fresh stimulus package for the American economy.

"Democrats and Republicans are still very far (from) reaching a deal, and this means no further immediate aid in terms of fiscal policy," said Naeem Aslam, chief market analyst at Avatrade.

Powell has been unusually vocal about the need for more action by the government as the Fed can only lend, not spend on programs.

As the two storms barrel into the Gulf of Mexico, oil companies have shut down production in the region, cutting off about 1.5 million barrels per-day, and evacuated workers.

Though Marco was downgraded to a tropical storm, Laura is expected to become a hurricane on Tuesday.

- Key figures around 2100 GMT -

New York - Dow: UP 1.4 percent at 28,308.46 points (close)

New York - S&P 500: UP 1.0 percent at 3,431.28 points (close)

New York - Nasdaq: UP 0.6 percent at 11,379.72 points (close)

London - FTSE 100:  UP 1.7 percent at 6,104.73 points (close) 

Frankfurt - DAX 30: UP 2.4 percent at 13,066.54 (close)

Paris - CAC 40: UP 2.3 percent at 5,007.89 (close)

EURO STOXX 50: UP 2.2 percent at 3,331.74 (close)

Tokyo - Nikkei 225: UP 0.3 percent at 22,985.51 (close)

Hong Kong - Hang Seng: UP 1.7 percent at 25,551.58 (close)

Shanghai - Composite: UP 0.2 percent at 3,385.64 (close)

Euro/dollar: UNCH at $1.179 

Dollar/yen: UP at 105.98 yen from 105.78 yen 

Pound/dollar: DOWN at $1.3061 from $1.3087

Euro/pound: UP at 90.21 pence from 90.09 pence

Brent North Sea crude: UP 1.51 percent at $45.02 per barrel

West Texas Intermediate: UP 0.1 percent at $42.39 per barrel