Markets in Europe opened higher on Monday after a mixed trading day in Asia.
The resurgence of coronavirus outbreaks has prompted some countries to take stricter precautions to curb another wave of the pandemic.
Austria was blocked across the country early Monday in a desperate effort to contain the spread of infections. Chancellor Alexander Schallenberg announced last week that Austria is introducing a vaccine mandate on February 1.
Tens of thousands of people marched in Brussels on Sunday to protest tougher COVID-19 restrictions imposed by the Belgian government.
The World Health Organization said last week that Europe is now a pandemic hotspot, the only region in which deaths from COVID-19 are on the rise.
Nonetheless, the markets seem to have started the week on a strong note. Germany’s DAX climbed 0.1% to 29,774.11, while the CAC 40 in Paris added 0.3% to 7,130.80. Britain’s FTSE 100 rose 0.4% to 7,251.02.
US futures also showed a good start, with the Dow Jones Industrial Average and S&P 500 up 0.3%.
On Wall Street on Friday, the Nasdaq composite index added 0.4%, while the S&P 500 fell 0.1%. The Dow Industrial Average fell 0.8%. The Russell 2000 Index lost 0.9% to 2343.16.
Investors are waiting to see if President Joe Biden decides to keep Jerome Powell at the helm of the Fed.
Biden is expected to announce within days who he will choose for the country’s most powerful economic position. Many Fed observers expect Powell to be offered a second term, although Lael Brainard, a member of the Fed’s Board of Governors, has emerged as the leading alternative.
The decision could have a huge impact, given the key role the Fed plays in determining the future course for the world’s largest economy.
In Asia, the Shanghai Composite Index rose 0.6% to hit 3,582.08 on Monday, while the Hang Seng Index in Hong Kong lost 0.4% to 24,951.34.
South Korea’s Kospi rose 1.4% to 3013.25 as shares in the country’s largest company, Samsung Electronics, jumped 5.2%.
Tokyo’s Nikkei 225 recovered from previous losses, climbing 0.1% to 29,774.11. In Australia, the S & P / ASX 500 fell 0.6% to 7,353.10.
India’s Sensex slipped 2.5%.
Reports that Chinese central bank advisers pointed to inflation and slow growth risks leading to “quasi-stagflation” signaled conflicting pressures Beijing is facing.
Nomura’s Ting Lu said real estate lending controls, new waves of COVID-19 outbreaks and tough measures to combat them, and rising prices are exacerbating China’s political woes.
“The multitude of meeting memorandums and policy reports show that Beijing is increasingly concerned about the slowdown in economic growth and has begun to take steps to change its political stance to prevent further slowdown in growth,” Ting said.
The stock as a whole gained traction as companies reported better-than-expected earnings for the last quarter.
However, most of them face higher raw material costs and supply chain problems that can reduce future profits. Consumers have absorbed higher prices so far, but analysts fear they could start saving if higher prices persist for too long.
“Stock markets continue to trade at record highs in or around the US, and who can blame them? The US data remains strong, although the noise of inflation is getting louder every day, ”said Jeffrey Halley of Oanda in a comment.
The situation puts pressure on the Fed act faster to curb their ultra-low rates in order to combat rising prices. On Friday, Bank of America analysts predicted that the Fed would likely start raising its benchmark interest rate in the second quarter of 2022, two quarters earlier than they had previously forecast.
Elsewhere, benchmark US crude added 30 cents to $ 76.24 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, which is the basis for international prices, added 25 cents to $ 79.14 a barrel.
The US dollar rose to 114.08 Japanese yen from 113.96 yen on Friday. The euro fell to $ 1.1284 from $ 1.1289.