October 26, 2020

Market and Financial News Aggregator

European Stocks Moving Up Sharply On Vaccine Hopes, Economic Data

3 min read

European stocks are notably higher Monday afternoon, extending gains after a firm start, with several counters attracting buyers after two successive days of notable losses.

Reports showing a significant improvement in Eurozone investor confidence in September, and a strong rise in U.K. house prices in the month of August appear to be outweighing concerns about U.S.-China tensions, Brexit and data showing a sharp moderation in German industrial production. Data showing a jump in Chinese exports and a bigger than expected increase in China’s trade surplus contribute as well to the firm trend in European markets.

Investors are also closely following news about coronavirus vaccines. According to reports Australia is likely to receive its first batches of a potential coronavirus vaccine early 2021. Vaccine developed by AstraZeneca and Oxford University, and the one developed by Australia’s CSL labs with the University of Queensland are the two vaccines named in the report.

Meanwhile, French pharma firm Sanofi has said that the vaccine developed by it with U.K.’s GlaxoSmithKline will cost less than 10 euros.

On the Brexit front, the U.K. is reportedly planning a legislation that will override the Brexit withdrawal agreement on Northern Ireland.

The pan European Stoxx 600 is up 1.34% at 366.77. The U.K.’s FTSE 100 is rising 1.9% to 5,909.04, Germany’s DAX is climbing 1.56% to 13,042.53 and France’s CAC 40 is up 1.54% at 5,041.40. Switzerland’s SMI is advancing 1.25% at 10,280.10.

In the U.K. market, Scottish Mortgage is rising nearly 6%. Ashtead Group, Rolls-Royce Holdings, Barratt Developments, Experian, Meggitt, TUI, AstraZeneca, Hikma Pharmaceuticals, GlaxoSmithKline, Right Move and Johnson Matthey are gaining 3 to 4.5%.

Royal Bank, Coca-Cola, Ocado Group, Bunzi, Melrose and Prudential are also up sharply, while Taylor Wimpey, Hiscox, Aveva Group, IAG and Flutter Entertainment are down 2 to 5%.

In Germany, Daimler, Volkswagen, Infineon Technologies, Wirecard, Vonovia, SAP, Covestro and Merck are climbing 2 to 4%. Allianz, RWE, Linde and Continental are also notably higher, while Deutsche Bank and Lufthansa are weak.

In the French market, Airbus Group shares are moving up 4.2%. WorldLine, Safran, Engie, Dassault Systemes, Renault, Peugeot, Sodexo, Schneider Electric and STMicroElectronics are gaining 2 to 4%.

Publicis Groupe, Essilor, Unibail Rodamco, Carrefour and Societe Generale are down with sharp to moderate losses.

On the economic front, data from Destatis revealed Germany’s industrial production growth moderated sharply in July, growing 1.2% on month. Economists had expected industrial production to see a 4.7% increase, after a 9.3% growth in June. On a yearly basis, industrial output fell 10%, following June’s 11.4% decrease.

UK house prices increased at the fastest pace since late 2016 driven by the pent-up demand and stamp duty reduction, data from the Lloyds Bank subsidiary Halifax and IHS Markit showed.

House prices increased 5.2% on a yearly basis in three months to August, which was the strongest since late 2016. Prices had advanced 3.8% in three months to July. On a monthly basis, house price growth slowed marginally to 1.6% in August from 1.7% in July.

Eurozone investor confidence improved to the highest since February as the economy continued to recover from the coronavirus induced slump, survey data from Sentix showed.

The eurozone investor confidence index rose to -8.0 in September from -13.4 in August. This was the fifth successive increase and reached its highest level since February. The current situation index came in at -33.0 versus -41.3 in the previous month. At the same time, the expectations indicator climbed marginally to 20.8 from 19.3.

In Germany, the investor confidence index rose to -0.1 in September from -4.5 in August. This was also the best value since February.

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Market Analysis

2020-09-07 07:58:46

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