European closed up as EU chief declares: 'The United States is back'
European stock markets rose on Wednesday ahead of Joe Biden’s inauguration as US president.
Biden was sworn in as the 46th president of the United States in a ceremony at the Capitol in Washington DC at 12pm ET (5pm UK) on Wednesday, shortly after markets shut in Europe.
European leaders expressed their happiness at Biden’s incoming presidency, which many hope will thaw the frosty relationship between the US and EU that developed under president Donald Trump.
“The United States is back,” European Commission president Ursula von der Leyen tweeted on Wednesday morning. “And Europe stands ready. To reconnect with an old and trusted partner, to breathe new life into our cherished alliance.”
The FTSE 100 (^FTSE) rose 0.4% in London, while the DAX (^GDAXI) gained 0.8% in Frankfurt and the CAC 40 (^FCHI) rose 0.5% in Paris.
European Council president Charles Michel said Biden’s elevation to the presidency was “an opportunity to rejuvenate the transatlantic relationship,” CNBC reported.
The EU published a paper in December calling for a “new transatlantic agenda.” The statement called Biden’s presidency a “a once-in-a-generation opportunity to design a new transatlantic agenda for global cooperation based on our common values, interests and global influence.”
The EU has proposed an alliance focused on combating COVID-19, protecting the climate and democracy, and reigning in the power and influence of Big Tech.
In the UK, home secretary Priti Patel told Sky News a “new political era” was dawning in America.
“America has an enormous role to play in terms of global leadership and we look forward to supporting America on many of those challenges,” she said.
Stocks rose on Wall Street. The S&P 500 (^GSPC) was up 1.2% as Biden was sworn in, while the Dow Jones Index (^DJI) was up 0.7%, and the Nasdq (^IXIC) had rallied 1.8%.
Biden’s elevation to the White House is expected to have an immediate impact on policy, which will have implications for companies and economies around the world.
“It’s already been trailed that today will see a number of Executive Orders signed by Biden, including the re-entry of the US into the Paris climate change agreement, the extension of a ban on evictions and foreclosures thanks to the pandemic, a federal mask mandate that will require the wearing of masks in federal buildings and on inter-state travel, as well as the reversal of President Trump’s travel ban on a number of Muslim-majority nations,” said Jim Reid, a senior strategist at Deutsche Bank.
“On top of this, Biden has of course already unveiled a $1.9tn (£1.39tn) stimulus proposal that’s a first basis for negotiation but one that he wants to pass quickly through Congress, as well targeting 100m vaccinations within his first 100 days in office.”
WATCH: Biden to be sworn in as 46th US president, ending Trump era
Overnight, Chinese markets had surged during the Asian session, despite signs the Biden administration will continue to take a tough line against the world’s second biggest economy. Incoming US Treasury Secretary Janet Yellen said the US must “take on China’s abusive, unfair and illegal practices” during her confirmation hearing on Tuesday.
The Shanghai Composite (000001.SS) rose half a percent, the Shenzen Component (399001.SZ) rallied 1.5%, and the Hong Kong Hang Send (^HSI) gained 1%.
Elsewhere in the region, Japan’s Nikkei (^225) fell 0.4%, South Korea’s KOSPI (^KS11) rose 0.7%, and Australia’s ASX 200 (^AXJO) gained 0.4%.
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