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Eurozone equities rise as EU leaders push for deal

By AFP - Jul 20,2020 - Last updated at Jul 20,2020

A trader makes a phone call outside the New York Stock Exchange on Monday at Wall Street in New York City (AFP photo)

LONDON — Eurozone stock markets pushed higher Monday as EU leaders laboured to pin down a 750-billion-euro ($860-billion) coronavirus rescue package for the battered region.

The euro hit a four-month dollar peak of $1.1468, before paring its gains.

Frankfurt equities rose 1 per cent and Paris added 0.5 per cent.

Outside the eurozone, London lost 0.5 per cent.

Wall Street was mixed as investors awaited congressional debate on another round of stimulus spending and major earnings releases later in the week.

Sentiment was hit by contrasting developments regarding the coronavirus pandemic.

A spike in new COVID-19 infections forced fresh containment measures — notably in Australia, Hong Kong and the United States — and fuelled fears about the stuttering economic recovery.

Meanwhile, two studies offered fresh hope of a potential vaccine, which is the only development that would provide safety to people and allow economies to operate normally.

EU leaders resumed talks to resolve their deadlock on a huge coronavirus rescue package back on track after a furious row about grants for member states threatened to derail it.

The talks by the 27 followed three days and nights of prolonged wrangling that failed to agree a plan to help drag Europe out of a painful pandemic-induced recession.

French President Emmanuel Macron and German Chancellor Angela Merkel expressed cautious optimism for a deal as the talks resumed on Monday

'Hopes high' 


"Hopes are high for the deal to get done today, with risk appetite mainly looking intact even if they need another week to finalise the technical details," said analyst Edward Moya at online currency trading platform Oanda.

"The EU is known for bickering, but it is also known for brokering deals," said market analyst David Madden at CMC Markets UK.

Meanwhile, as the COVID-19 pandemic shows little sign of abating, the rally that has characterised equity markets since hitting a low in March is showing signs of stalling.

The spikes in the number of infections — Hong Kong saw a record rise on Sunday, while Florida's has been described as "out of control" — have led leaders to unveil new measures to curb the disease's spread, including closing bars and restaurants and making masks compulsory.

Investors are keeping an eye on Washington, hoping lawmakers will press ahead with fresh stimulus measures for the world's top economy.

Oil prices slid lower as Chevron said it had agreed to buy US company Noble Energy. The plunge in oil prices as coronavirus lockdowns throttled demand has made much oil production unprofitable.

"Many of the smaller companies can't survive in this environment and the incentive to make a deal will grow," said Moya.

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