Lockdown Winners and Losers Are Upended in European Stock Rally

(Bloomberg) -- European stock traders are looking ahead to life after Covid-19, upending the pandemic winners and losers in the latest leg of the rally.

Cinema chain owner Cineworld Group Plc, British Airways parent IAG SA and mall owner Klepierre SA all climbed on Tuesday, while lockdown beneficiaries such as online grocer Ocado Group Plc and tech stocks led losses in the Stoxx Europe 600 Index.

Europe’s benchmark closed 0.9% higher, in an extension of yesterday’s surge that was sparked by optimism about a coronavirus vaccine.

Equities have rebounded strongly from an October slump, with the Stoxx 600 poised for its best monthly gain since April 2009. Value sectors like banks and energy shares are outperforming after Joe Biden’s U.S. presidential win dispelled political uncertainty, adding to positive news about a Covid-19 vaccine by Pfizer Inc. and BioNTech SE.

Read: ‘Trash Rally’ Propels European Markets to Top Global Performers

“There is no doubt that the Pfizer vaccine news has altered the market’s outlook on the Covid pandemic -- there is now some light at the end of the tunnel,” said Fiona Cincotta, a market analyst at City Index.

Shares worst hit by lockdowns this year, such as airlines, pub operators and hotels, are rallying this week on investor optimism that a viable vaccine for the coronavirus might soon be available, enabling the easing of restrictions.

The surge in beaten-down stocks is putting pressure on short sellers, who have been seeking to make a profit from falling share prices. Cineworld soared 18%, while Klepierre also jumped 18% and plane-engine maker Rolls-Royce Holdings Plc rallied 7%. All three stocks are among the most shorted European companies, according to data compiled by IHS Markit Ltd., and are still down for the year.

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