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Upbeat business activity, vaccine hopes lift European shares - Metro US

Upbeat business activity, vaccine hopes lift European shares

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

(Reuters) – European shares closed higher on Wednesday on upbeat regional business activity data, rising hopes of a Brexit trade deal and the possible roll-out of a COVID-19 vaccine on the continent before the new year.

Rallying for a third straight session, the pan-European STOXX 600 index closed 0.8% higher, having touched a near 10-month peak during the session.

Flash PMIs for December showed the euro zone economy far exceeded expectations, with manufacturers reporting strong growth fuelled by rising exports and a booming performance from Germany. However, the region’s largest economy headed into a stricter lockdown on Wednesday.

“The resilience of the economy ahead of stricter measures is an important positive take away in very uncertain times,” said Bert Colijn, senior economist, eurozone at ING.

Colijn warned that “the worst could still be to come” as new curbs take effect.

But hopes for an end to the pandemic buoyed sentiment, as a European Commission official said the EU could give final approval for the Pfizer-BioNTech COVID-19 vaccine as early as Dec. 23. The bloc’s medical regulator has moved forward its meeting following approvals in Britain and the United States.

On the Brexit front, continuing talks saw markets hold out hope for a deal, but the two sides still struggled to compromise on fishing, Ireland’s state broadcaster RTE said.

London’s FTSE 100 weathered a higher pound to rise 0.9% and break a three session losing run. [.L]

While most sectors in Europe rose, banks slid 1.1%, reversing some of the previous two sessions’ almost 3% gain. Spain’s lender-heavy IBEX ended in the red.

Auto stocks hit a near three-month high with German tire maker Continental surging 2.9% after it sharply raised it its medium term forecast for earnings before interest and taxes.

The German DAX stock index posted its best session in three months, up 1.5%.

Investors will also be watching the U.S. Federal Reserve’s policy decision, with markets focused on its bond-buying plans and any details on how the vaccine roll-out has changed the economic outlook. The decision is due at 2 p.m. ET (1900 GMT).

Among individual stocks, Biotech firm Galapagos NV skidded to the bottom of the STOXX 600 after its partner for experimental rheumatoid arthritis treatment, Gilead Sciences, decided not to pursue U.S. approval for the drug.

Topping the index was a 23.3% jump in Altice Europe after its founder increased an offer to take the telecoms group private by 30%.

(Additional reporting by Amal S in Bengaluru; Editing by Arun Koyyur, Kirsten Donovan)

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