The pound jumped yesterday, while European stock markets were little changed, as Britain and the EU were finally preparing to announce a post-Brexit trade deal, which was later sealed yesterday.
Sterling was up around half a % against the dollar and euro as London’s FTSE 100 stocks index closed up 0.1% at 6,502.11 points in shortened pre-Christmas trading.
In the eurozone, the Paris CAC 40 index finished with a loss of 0.1% at 5,522.01 points.
The Frankfurt Stock Exchange was closed.
The EURO STOXX 50 index closed 0.1% up at 3,543.28 points.
Traders said early gains were capped by rising fears over a new strain of the coronavirus that has forced the UK to impose tougher regional lockdowns across the nation.
Asian stock markets earlier closed mixed.
Hong Kong finished higher but was weighed down by a fall of more than 8% in Alibaba shares after China said it had launched a probe into the e-commerce giant for “suspected monopolistic practices”. The Hang Seng closed 0.2% up at 26,386.56 points and Tokyo’s Nikkei 225 closed 0.5% up at 26,668.35 points, while Shanghai’s Composite closed 0.6% down at 3,363.11 points.
Pound closed up at $1.3564 from $1.3515 on Wednesday and at 89.85 pence down from 90.16 pence against euro.
Elsewhere, oil prices were down around 1.0%. 
The pound was the main focus of attention as Britain and the European Union hammered out the final details of a post-Brexit trade deal set to be announced later yesterday.
The front pages of several British newspapers had already proclaimed victory for Prime Minister Boris Johnson in the quest for a pact but in Brussels work continued.
“The announcement by Santa-Boris comes in the nick of time,” Oanda analyst Jeffrey Halley said in a note to clients.
“Still, it leaves the UK isolated internationally due to Covid-19, thousands of trucks marooned on each side of the English Channel and follows more of England’s regions being moved into a hard lockdown.”
Thousands of truckers endured Christmas Eve stranded near a major British port, ensnared in the chaos unleashed by the new coronavirus strain.
However, European nations on Wednesday began easing travel bans on Britain that had been imposed over the strain – which UK officials believe spreads faster.
Equity gains remain constrained by ongoing concerns about the surge in virus infections around the world that are forcing governments to impose fresh containment measures, offsetting hopes for the rollout of vaccines.
Analysts, meanwhile, said that while US President Donald Trump’s outburst against a $900bn stimulus agreement was holding up help for American families, the general consensus is that a package will eventually be passed, and possibly with more cash handouts.
Wall Street’s main indexes rose in a shortened session yesterday as technology stocks gained on the prospect of a delay to the coronavirus stimulus package, while Alibaba slumped after China launched an antitrust investigation.
Republicans and Democrats in the US House of Representatives blocked attempts to alter a $2.3tn aid and government spending package, which was unanimously passed by Congress on Monday.
Reports earlier said Democrats aimed to win quick passage of legislation providing $2,000 in direct payments to Americans after President Donald Trump unexpectedly insisted on the provision.
“The market is just muddled by confusion over how the stimulus is going to play out and whether there’s a potential even for a government shutdown,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
“The stimulus will be coming, but whether it’s delayed until Biden takes office or whether they can negotiate it over the next couple of days is an open question.”
Markets were set to close at 1:00PM ET yesterday and will remain closed for Christmas holiday today.
At 10:16am ET, the Dow Jones Industrial Average was up 48.03 points, or 0.16%, at 30,177.86, the S&P 500 was up 9.30 points, or 0.25%, at 3,699.31. The Nasdaq Composite was up 48.44 points, or 0.38%, at 12,819.55.
Financials, industrials and energy stocks were the worst performing sectors.
Technology was the best performing S&P sector, rising about 0.8%.
Alibaba Group plunged 13.8% to a near six-month low after China launched an antitrust investigation into the company as part of an accelerating crackdown on anticompetitive behaviour.
The news also pulled down US-listed shares of other Chinese companies like Baidu Inc and JD.com Inc.
Altimmune Inc slipped 8.2% after the US Food and Drug Administration issued a clinical hold on the drug developer’s application to begin human testing of its single-dose Covid-19 vaccine, AdCovid.
Advancing issues outnumbered decliners by a 1.15-to-1 ratio on the NYSE and by a 1.10-to-1 ratio on the Nasdaq. The S&P index recorded 5 new 52-week highs and no new low, while the Nasdaq recorded 107 new highs and 4 new lows.