European Stocks Rise as Investors Weigh Covid Vaccine Optimism

(Bloomberg) -- European equities advanced as investors weighed progress in the development of Covid-19 vaccines against the risk of rising virus cases.

The Stoxx Europe 600 Index ended 0.4% higher. Cyclical sectors, such as automakers, miners and banks, outperformed, while industrial goods and health-care stocks lagged. Pfizer Inc. said Wednesday that a final analysis of clinical-trial data showed its vaccine was 95% effective, paving the way for the company to apply for the first U.S. regulatory authorization of a coronavirus shot within days.

Investors have been analyzing pharmaceutical companies’ reports about progress in developing a vaccine, which could remove the risk of new lockdowns that hurt economic growth. Global equities got a boost after Moderna Inc. announced Monday that its vaccine was 94.5% effective.

“The announcement of highly effective vaccines, assuming they work as well as the initial results suggest, should mark the start of a sustainable multi-year period of economic recovery,” Mike Bell, a global market strategist at JPMorgan Asset Management, said by email. “It will take time to roll out the vaccines and the logistical challenges are significant, particularly in some emerging economies, but none of that changes the fact that in two years the global economy will have grown stronger than it is now.”

The reaction to the Pfizer data today was more muted than during previous vaccine updates as a lot of good news is already priced into the market. The Stoxx 600 is up nearly 7% since Pfizer’s vaccine announcement last week sent equities surging.

Among single stocks, RSA Insurance Group Plc advanced after it accepted a 7.2 billion-pound ($9.6 billion) offer from Canada’s Intact Financial Corp. and Danish insurer Tryg A/S., in the biggest acquisition of a U.K.-listed company this year. Hargreaves Lansdown Plc dropped 5.5% as co-founder Stephen Lansdown sold a stake at a discount to Tuesday’s closing price.

©2020 Bloomberg L.P.