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European shares up for fourth session on stimulus, vaccine optimism - Metro US

European shares up for fourth session on stimulus, vaccine optimism

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt

(Reuters) – European shares remained at 10-month highs on Thursday, as hopes of more stimulus in the United States and potential COVID-19 vaccine rollouts in Europe strengthened the case for a global economic recovery.

Germany’s DAX climbed 1% to hit its highest since February, while the pan-European STOXX 600 index rose 0.5%, both extending gains to a fourth straight session.

Germany and France said they were set to begin inoculating their citizens with the Pfizer-BioNtech vaccine in the last week of December, once it is approved by the European Medicines Agency.

“The vaccines are underpinning this entire rally and without the vaccines, I don’t think we’ll be doing as well as we are,” said Craig Erlam, senior market analyst at OANDA Europe.

“Each and every regulatory approval effectively aids any economic recovery.”

Meanwhile, U.S. lawmakers are inching closer to a $900 billion stimulus package, while the Federal Reserve promised to keep funnelling cash into markets until the U.S. economic recovery is secure.

This comes after the European Central Bank rolled out more stimulus measures last week.

Aggressive monetary support has helped the STOXX 600 come closer to pre-pandemic levels, but it still remains about 8% below its high this year.

A resurgence in COVID-19 cases leading to more curbs had dented the recovery path in October, but vaccine optimism put it back on track until Brexit concerns slowed the pace.

London’s FTSE 100 was up 0.3% with eyes on a Bank of England meeting later in the day. The bank is expected to keep policy unchanged, awaiting the fate of a trade deal ahead of Britain’s exit from the bloc by the year-end.

“There’s just optimism around a deal both in the United States and Brexit. These are the two major issues that are still outstanding for the year and both of them appear to be on a positive trajectory and could be wrapped up over the next few days,” Erlam said.

Shares of WPP Plc jumped 2.9% as the world’s biggest advertising firm said it expects to return to its 2019 level of net sales by 2022.

As iron ore and copper prices rose, the basic materials index jumped 1.6%. Rio Tinto was up 1.7% after the miner appointed Chief Financial Officer Jakob Stausholm as its next chief executive.

Novartis rose 0.8%, after the drugmaker said it would acquire U.S.-based neuroscience company Cadent for up to $770 million.

(Reporting by Susan Mathew in Bengaluru; Editing by Arun Koyyur)

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