European Stocks Extend Gains Thanks to US Stimulus Hopes

European stocks extended their gains Thursday (January 21st) on hopes of a major US stimulus plan under the administration of the new president, Joe Biden, while investors looked to the European Central Bank for indications about the economic strength of the euro area.

The Stoxx600 index of European shares rose 0.7%, reaching a new high since February, while the shares of car manufacturers, banks and industrial companies made the largest gains.

Asian stocks and their Wall Street counterparts hit record highs after Biden took office on Wednesday and signed several executive orders that included America’s return to the Paris Global Agreement to combat climate change.

Meanwhile, the European Central Bank is widely expected to keep its easing monetary policy unchanged later in the day, but it will keep the door open for further stimulus as the second wave of the COVID-19 spread darkens the already weak outlook.