The Fed says the US economic recovery is well on track

London (AFP) - World equity markets gained ground on Thursday as the Covid recovery brightened on upbeat corporate earnings and the US Federal Reserve’s latest economic outlook, dealers said.

Shares in London rose 0.9 percent on a barrage of positive company results, including from Covid-19 vaccine maker AstraZeneca, energy major Shell and lender Lloyds.

Frankfurt added 0.5 percent and Paris gained 0.4 percent, boosted by earnings at German carmaker Volkswagen and France’s TotalEnergies.

Trading in New York was upbeat as well, with the Dow up by 0.5 percent at midday.

“Earnings remain very promising,” said OANDA analyst Craig Erlam.

British pharmaceuticals giant AstraZeneca revealed its coronavirus vaccine generated $1.2 billion (1 billion euros) in sales in the first half of the year.

The news came one day after US drugmaker Pfizer lifted its annual revenue and profit projections on surging demand for its vaccine against the virus.

The oil sector was energised by news that both Shell and Total rebounded back into profit in the second quarter of 2021, boosted by the crude market’s recovery from virus turmoil.

Investors were meanwhile awaiting the latest US tech earnings from online behemoth Amazon, which soared in popularity during the pandemic due to spiking demand from locked-down populations.

- Recovery on track: Fed -

Traders were also pleased when the Fed acknowledged the US economic recovery was well on track – but added that it would not taper monetary policy just yet.

The US central bank said the pandemic recovery was progressing well but it was still too early to take away ultra-loose policies that have helped nurse the economy back to health.

“The Fed gave a balanced performance on Wednesday that has just about satisfied the markets without getting investors too excited,” noted Erlam.

The US central bank has said it will maintain its massive bond-buying and record low interest rate scheme for as long as it takes to tame unemployment and keep inflation running hot for an extended period.

“Amidst all the gloom and angst of the last months this is the kind of day investors will have been hoping for and one that will boost confidence that recovery with a capital R is well under way,” said Danni Hewson, an analyst at AJ Bell.

The developments overshadowed concerns about the spread of the Delta coronavirus variant that is sending infection rates spiking in several countries – including those with high vaccination rates – and forcing some governments to impose lockdowns or other containment measures.

- Key figures around 1600 GMT -

New York - Dow: UP 0.5 percent at 35,118.54 points

EURO STOXX 50: UP 0.3 percent at 4,116.77

London - FTSE 100: UP 0.9 percent at 7,078.42 (close)

Frankfurt - DAX 30: UP 0.5 percent at 15,640.47 (close)

Paris - CAC 40: UP 0.4 percent at 6,633.77 (close)

Tokyo - Nikkei 225: UP 0.7 percent at 27,782.42 (close)

Hong Kong - Hang Seng Index: UP 3.3 percent at 26,315.32 (close)

Shanghai - Composite: UP 1.5 percent at 3,411.72 (close)

Euro/dollar: UP at $1.1885 from $1.1845 at 2100 GMT

Euro/pound: DOWN at 85.09 pence from 85.19 pence

Pound/dollar: UP at $1.3967 from $1.3845

Dollar/yen: DOWN at 109.54 yen from 109.91 yen

Brent North Sea crude: UP 1.3 percent at $75.72 per barrel

West Texas Intermediate: UP 1.3 percent at $73.35 per barrel