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20 Jan 2021 | 17:48

Europe close: Stocks grind higher on optimism ahead of Biden inauguration

(Sharecast News) - European stocks finished higher on Wednesday with investors seemingly in a positive mood as Joe Biden was sworn in as the next US President amid prospects of a large stimulus package for the American economy. "The European session is a little bit more mixed, but it is good to see stocks putting in a good performance for another day, after over a week of very indecisive trading," said IG chief market analyst, Chris Beauchamp.

"So far Inauguration Day has gone smoothly, the massive police and National Guard presence preventing any major civil disturbances, which is something the market is likely to take in a positive frame of mind, and with Biden promising to sign a raft of executive orders once he enters the Oval Office investors will hope that the new administration carries on in this activist vein, at least where the fiscal stimulus proposals are concerned."

The pan-European STOXX 600 index gained 0.72% to 410.84 while Germany's Dax was ahead by 0.77% at 13,921.37 Italy's FTSE MIB was also up, adding 0.93% to 22,650.78, after Prime Minister Giuseppe Conte won a confidence vote in the upper house Senate on Tuesday, allowing him to remain in office after a junior partner quit his coalition last week.

Notably, investors appeared to shake off reports that the Pfizer-BioNTech Covid-19 vaccine being rolled-out across many countries might be less effective against the new strain detected in South Africa over Christmas.

Luxury stocks were in favour after Richemont posted a 5% increase in quarterly sales, led by strong growth at its jewellery brands in Asia Pacific and the Middle East. The stock rose 3%.

Education publisher Pearson led the risers, with shares in the company up 9% as it said sales and profit for the full year were in line with expectations despite the additional impact of Covid-19 in the fourth quarter.

Britain's Burberry jumped 4% after an initial morning surge as the high-end fashion retailer released a positive earnings update, although it warned of a Brexit hit on sales to non-EU customers after a VAT refund scheme ended at the start of January.

Germany's Hugo Boss added 4% after Mike Ashley-led Frasers said it boosted its stake in the company.

Shares in Nordic telecom operator Telia advanced 4% as the firm reported better-than-anticipated operational cash flow in 2020.

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