Global equities looked set to cap the week on a strong note, following the confirmation of Joe Biden as the next US president and expectations that his administration will inject more support into the economy.

The Stoxx Europe 600 was up 0.5 per cent by lunchtime on Friday, putting the region-wide benchmark on track to close the week nearly 3 per cent higher in its best performance since the vaccine-led rally of early November.

An MSCI index tracking developed market equities rose 0.3 per cent to a fresh high, supported by gains in Asian markets, leaving the global benchmark heading for its best first week of the year since 2018. London’s FTSE 100 edged down 0.2 per cent but was still on course for a weekly rise of more than 6 per cent, its strongest showing since mid-November.

Wall Street remained on track to open higher, despite the US non-farm payroll data coming in sharply below expectations: the country lost 140,000 jobs in December compared with the anticipated rise of 71,000. Futures trading pointed to the blue-chip S&P 500 index climbing 0.4 per cent at the opening bell in New York.

Investors expect the Biden administration to sign off on more fiscal stimulus, to add to the $900bn already agreed by lawmakers, after Democratic victories in Georgia’s run-off elections gave the party control of both houses of Congress.

“This is probably the best news for the economy since vaccines were approved,” said Adam Kurpiel, head of rates strategy at Société Générale.

Global stocks have risen this week as traders looked past the violent clashes in Washington on Wednesday, when a pro-Trump mob stormed the Capitol and interrupted the confirmation of Mr Biden as president-elect.

“The only noise in markets . . . was a bullish stampede as [they] continued their strong start to 2021,” said Jim Reid, a strategist at Deutsche Bank.

Catherine Doyle, an investment specialist in Newton Investment Management’s Real Return team, said the Georgia vote and expectations for more stimulus were “what’s dominating markets”. Absent any hurdles relating to the vaccine rollout or a new strain of the virus, “it feels like we’re now really on track for a fairly consistent and steady recovery”, she added.

Expectations that additional stimulus will also stoke inflation helped to send the yield on the 10-year US Treasury above 1 per cent this week for the first time since the pandemic roiled markets in March. The 10-year note climbed a further 0.03 percentage points to 1.097 per cent on Friday.

All three leading benchmarks on Wall Street hit record highs on Thursday, with a broad range of sectors advancing.

“Value” stocks — shares judged to be cheap against their earnings or assets — have performed particularly well this week.

“Value plays are really working very well in this first week,” said Nadège Dufossé, head of cross-asset strategy at Luxembourg-based fund manager Candriam. The environment is “more constructive for risky assets and for the reflation trade”, she added.

Fast-growing tech companies have also rallied.

“Tech stocks are picking up, indicating that the valuation gap between value and growth will take time to converge until such time as the economy gains more traction,” said Sebastien Galy, senior macro strategist at Nordea Asset Management.

Fahad Kamal, chief investment officer at Kleinwort Hambros, warned that investors should be wary of possible risks, pointing to high equity valuations, the growing inflation and the “mountains of debt everywhere”.

“Are we all missing something? Are we in the latter stages of a really heady bull that’s about to crash?” he said.

Brent crude, the international oil benchmark, was up 1.5 per cent at $55.21 a barrel. Meanwhile, gold, a haven asset, slipped 1.7 per cent on hopes for a sustained recovery in 2021, to $1,880 per troy ounce.

In the Asia-Pacific region, Japan’s Topix closed up 1.6 per cent at its highest point since early 2018 while Hong Kong’s Hang Seng climbed 1.2 per cent.