European stocks rise as investors cheer vaccine updates

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EUROPE MARKETS

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European stocks shook off a sluggish morning and pushed higher on Wednesday, after drugmaker Pfizer and partner BioNTech said they would seek emergency U.S. authorization within days for their COVID-19 treatment.

The Stoxx Europe 600 rose 0.4% to 390.57, after snapping a two-day winning steak on Tuesday. The German DAX and French CAC 40 rose 0.3% each, while the FTSE 100 rose 0.4%.

U.S. equity futures also moved higher, a day after stocks fell on disappointing retail sales growth, which appeared to overshadow recent upbeat news on the effectiveness of vaccines in development.

Pfizer and BioNTech said further interim results from their continuing vaccine study indicates 95% effectiveness for the shots, and protection for the vulnerable, elderly population.

Pfizer said it would seek Food and Drug Administration approval for emergency use of the vaccine within days. A week ago, the companies announced promising preliminary results, driving gains for stocks.

Markets were also cheered by reports the Federal Aviation Administration is expected to approve the return of Boeing’s 737 Max jets to airspace since their grounding in March 2019.

Investors have been buying shares of companies geared toward economic recovery from the virus, even as cases have surged on both sides of the Atlantic. European countries may be starting to get a handle on it, as restrictive measures have been in place for weeks in many places, while measures are beginning to appear across several U.S. states.

European Central Bank President Christine Lagarde said on Tuesday that encouraging COVID-19 vaccine news wouldn’t fundamentally change the central bank’s plan to add stimulus.

“I don’t want to downplay the very good news that the vaccines were, but I think that as a central bank, we have to be mindful of not just the short term and the news impact, we have to be mindful of the overall situation,” Lagarde told the Bloomberg New Economy Forum.

One risk, she noted, was if “consumers, investors and employers do not regard the pandemic as a one-off, this V-shape that we all aspired to, but as something that will recur over the course of time and as a result would lead them to completely change their behavior.”

Data showed the strain of rising restrictions. The European Automobile Manufacturers’ Association reported a 7.8% drop in October sales, after a small gain in September.

U.K. data showed a rise in annual consumer-price inflation for October, a gain that was boosted by higher clothing prices.

Among companies on the move, shares of RSA Insurance rose 4% after the insurer said it has agreed to a £7.2 billion ($9.5 billion) takeover offer from Intact Financial and Tryg RSA confirmed details of that offer more than two weeks ago.

Shares of Cie. Financière Richemont fell 1.4% after the luxury-goods maker said it had received shareholder approval for a conditional capital increase. The company plans to issue up to 22 million new A shares.

Croda International said that it will buy Fragrance Spanish Topco — which operates as Iberchem — for €820 million ($972.7 million). The chemicals company said it would fund the transaction via existing debt facilities and an equity placing. Shares rose 2%.

A.P. Moeller-Maersk announced a 10 billion Danish kroner ($1.59 billion) share-buyback program after the Danish shipping giant reporting an earnings rebound on surging demand. The company also raised guidance for a third time. Shares slipped 1%.

Shares of luxury-goods company LVMH Moët Hennessy Louis Vuitton climbed over 2%, leading the apparel sector higher, with sportswear company Adidas’ shares up 2.8%.

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