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U.S. President Donald Trump on Sunday signed into law a $2.3
trillion pandemic aid and spending package, restoring
unemployment benefits to millions of Americans and averting a
federal government shutdown in a crisis of his own making.
The benchmark European stock index jumped 0.5% to its highest
since Feb. 26, with automakers and energy stocks gaining the
most.
London markets were shut for Boxing Day but stocks in Germany, a
major supplier of autos to the UK, climbed to a record high,
signalling optimism around the Brexit trade deal.
"We can finally breathe a big sigh of relief and say that chaos
over the stimulus bill is over," said Hussein Sayed, chief
market strategist at FXTM.
"A sell-off has been averted and this could provide one last
boost to risk assets in the last four trading days of the year."
Huge amounts of stimulus and vaccine optimism have seen the
STOXX 600 recover nearly 43% from its March lows, though it is
on course to end the year about 4% lower.
Also supporting investor sentiment was Europe's cross-border
vaccination programme launched on Sunday, fuelling hopes of a
pandemic-free second half in 2021 and of a strong economic
rebound.
Among other European bourses, France's CAC 40 index and Spain's
IBEX gained nearly 0.7% each, as of 0900 GMT.
Britain signed the Brexit trade deal late on Thursday, just
seven days before it exits one of the world's biggest trading
blocs.
However, economists warned that the thin deal would not prevent
economic pain and disruption for the United Kingdom or for EU
member states, and many aspects of Britain's future relationship
with the EU remained to be hammered out, possibly over years.
(Reporting by Shashank Nayar in Bengaluru; Editing by Bernard
Orr and Subhranshu Sahu)
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