European Stocks Jump on Stimulus Bets After Biden Win Certified
(Bloomberg) -- European equities rose, led by cyclical sectors, as investors focused on prospects for economic stimulus after Congress formally certified Joe Biden as the new U.S. president.
The Stoxx 600 Index closed up 0.5% in London, with miners, construction and energy shares among the biggest climbers. Sentiment in Europe was also boosted by an unexpected rise in German factory orders.
U.S. stocks rallied on expectations of fresh stimulus, looking beyond the unrest when supporters of President Donald Trump broke into the U.S. Capitol. Clean-energy firms like Nel ASA surged 10% after the Democrats secured control of the Senate on bets they will unleash green investments and infrastructure spending.
On the downside, Ryanair Holdings Plc weighed on travel stocks, while the technology sector was hit by a slump in IT services provider Atos SE after it proposed a U.S. merger. Tech, last year’s top-performing subgroup, has come under pressure at the beginning of 2021 amid a rotation toward cheaper value shares that are seen as the favorite play on the economic recovery and reflation trade.
European equities have seen a positive start to 2021, boosted by optimism over the rollout of vaccinations, with investors buying into more cyclical areas of the market, such as miners, energy stocks and banks.
“From here on, the market narrative is really much dependent on that vaccine news: Is it being approved quickly, are they able to manufacture it quickly enough, is it being distributed quickly enough to beat the wave back in time?” said Seema Shah, chief strategist at Principal Global Investors.
“It’s not the Covid numbers that are important, it’s literally the news on the vaccine which is the most important,” Shah said by phone.
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