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Investing.com – European stock markets largely edged higher Monday, helped by renewed M&A talk as well as bullish brokerage upgrades amid uncertainty over the U.S. stimulus package and continued worries about the Covid-19 autumn surge.
At 4 AM ET (0800 GMT), the DAX in Germany traded 0.1% higher, the CAC 40 in France rose 0.1%, while the U.K.’s FTSE index dropped 0.2%.
Market attention continues to be focused on the prolonged U.S. political negotiations over a new coronavirus relief bill, with the passage of such a deal still up in the air.
The Trump administration proposed a new comprehensive $1.8 trillion stimulus deal on Friday, but this immediately ran into opposition on both sides of the political divide. Although this offer moved closer to the $2.2 trillion proposition House Speaker Nancy Pelosi had already put on the table, it was still not sufficient to appease the Democrats, while it also annoyed some Republicans, many of whom are reluctant to add to a growing federal debt pile.
That said, many are now looking past this administration, with polls showing Democrat candidate Joe Biden increasing his lead in the presidential election. Investors are increasingly expecting a Democrat-run White House, which should result in a large stimulus package.
“The prospects for stimulus in January look good,” said Paul Donovan, chief economist with UBS Global Wealth Management, in a morning note. “The prospects for stimulus before the election are fading again, though they have not disappeared entirely.”
Also helping was some corporate news, with KPN (AS:KPN) stock soaring 8.1% after Bloomberg reported that private-equity group EQT (NYSE:EQT) was considering a takeover offer for the Dutch telecom.
Additionally, Societe Generale (OTC:SCGLY) SA (PA:SOGN rose 3.1% after Jefferies (NYSE:JEF) upgraded the French bank to buy from hold, while Daimler (DE:DAIGn) climbed 1.5% as Goldman Sachs (NYSE:GS) upgraded the automaker to buy from sell.
However, the coronavirus remains a thorn in the side of European markets: Italy is preparing new nationwide restrictions in response to a spike in new cases, and Germany is also considering this possibility.
British Prime Minister Boris Johnson is expected to announce new measures to tackle a growing crisis on Monday, outlining three alert levels aimed at helping tailor restrictions for different parts of England. Johnson addresses the House of Commons at 10:30 AM ET (1430 GMT).
Oil prices weakened Monday, as output was restored in Norway, the world’s third largest exporter of oil and gas, with the end of a strike. U.S. producers also began pumping again after Hurricane Delta weakened.
U.S. crude futures traded 1.5% lower at $39.98 a barrel, while the international benchmark Brent contract fell 1.4% to $42.24. Both contracts gained more than 9% last week, the biggest weekly rise for Brent since June.
Elsewhere, gold futures rose 0.3% to $1,931.45/oz, while EUR/USD traded 0.1% lower at 1.1820.
