European Stocks Jump to One-Month High on Vaccine Optimism
(Bloomberg) -- European stocks rose to the highest level in more than a month, tracking global gains on optimism over progress in developing a vaccine for the coronavirus.
The Stoxx Europe 600 Index added 1.8% at the close as travel and industrial shares led gains. Drugmakers also outperformed. Sweden’s OMX Stockholm 30 Index closed 1.7% higher, after briefly erasing its 2020 losses in intraday trading.
A vaccine by U.S. biotech company Moderna Inc. produced antibodies to the coronavirus in all patients tested in an initial safety trial, federal researchers said. Risk assets extended gains and AstraZeneca Plc climbed after a report that a medical journal will release positive news on the coronavirus vaccine the company is developing with University of Oxford researchers.
Europe’s main benchmark is climbing back toward a three-month high reached in June. It has traded in a range in recent weeks as bullishness about an economic recovery has been tempered by worries over rising infections in parts of the world. Investors are also closely watching the earnings season for clues on corporate health.
“The Covid-19 vaccine news has quashed Monday’s risk-off tone, with Moderna’s trial helping to put a bid back into the risk-asset spectrum,” said Eleanor Creagh, a market strategist at Saxo Bank. “However, the price action highlights the highly speculative, momentum-chasing nature of this market and the ability to shrug off the drumbeat of bad news.”
Drugmakers were among companies boosting the Stoxx 600. Besides AstraZeneca, Roche Holding AG and Novartis AG also rose, gaining more than 1.8%. GlaxoSmithKline Plc advanced 2.9% after its blood cancer treatment won backing from a panel advising the U.S. Food and Drug Administration.
Banks underperformed, with SEB AB declining after its net income missed estimates. Svenska Handelsbanken AB also dropped, with Goldman Sachs Group Inc. noting a miss in core profit before provisions.
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