Left Menu
Development News Edition

European shares hit five-week high on rebound optimism, stimulus hopes

"Investors have not lost faith that further stimulus measures will follow and that an effective COVID-19 vaccine will soon be placed on the market," said Milan Cutkovic, market analyst at Axi. But a jump in domestic coronavirus cases has raised the spectre of fresh lockdowns and cast a shadow over a nascent economic rebound.

Reuters | Updated: 12-10-2020 21:42 IST | Created: 12-10-2020 21:42 IST
European shares hit five-week high on rebound optimism, stimulus hopes

European shares hit a five-week high on Monday as optimism about a stable economic recovery in China and hopes of more U.S. fiscal stimulus helped offset concerns around surging COVID-19 cases across the continent. The pan-European STOXX 600 marked a third straight day of gains to end 0.7% higher, led by utilities, technology and autos stocks.

The Trump administration on Sunday called on the U.S. Congress to pass a stripped-down coronavirus relief bill after talks stalled on a more comprehensive stimulus deal. "Investors have not lost faith that further stimulus measures will follow and that an effective COVID-19 vaccine will soon be placed on the market," said Milan Cutkovic, market analyst at Axi.

But a jump in domestic coronavirus cases has raised the spectre of fresh lockdowns and cast a shadow over a nascent economic rebound. With Italy preparing for nationwide curbs, the European Central Bank's chief economist, Philip Lane, said the euro zone economy was entering a tougher phase. UK Prime Minister Boris Johnson also imposed a tiered system of further restrictions on parts of England, including closing some pubs.

British pub and restaurant owners Marston's Plc and Restaurant Group Plc fell 5.3% and 9.3%, respectively, while the blue-chip FTSE 100 lost 0.3%. "Investors are walking on thin ice," Cutkovic said. "Further lockdowns would jeopardise the already fragile economic recovery and have lasting effects on consumer confidence."

Data on inflation, industrial production and business conditions is due later in the week. All eyes will also be on a European Union summit on Oct. 15 and 16, particularly with a UK-imposed deadline for a post-Brexit trade deal. "It seems progress has been made and if this continues, I would expect talks to continue beyond that self-imposed UK deadline," said Deutsche Bank strategist Jim Reid.

The Italian bourse ended 0.6% higher, shrugging off a slide in bank stocks as Italian government bond yields fell near record lows on expectations of a new round of stimulus from the European Central Bank. As the third-quarter corporate earnings season gets under way, analysts expect earnings at STOXX 600 firms to have declined 38% year-on-year in the quarter following a 50.8% slump in the prior quarter, according to Refinitiv data.

The European telecoms index surged to a three-week high, powered by a 6.8% jump for Dutch telecommunications company KPN following a report that Sweden-based private equity firm EQT was considering a takeover.


TRENDING

OPINION / BLOG / INTERVIEW

Turbulence surrounding tobacco control in Ghana

... ...

Smart healthcare: IoT redefining the way healthcare is delivered

As the world is embracing the new wave of digitalization triggered by the pandemic and the arrival of 5G, the adoption of IoT devices will further boom. With adoption set to soar, IoT security issues and other challenges cant be ignored any...

Refugee compassion and response: Ideas to mitigate disasters now and in their future

Their homeland becomes a forbidden territory for them and more likely than not, their journey to foreign soil is no less traumatizing, not to say deadly. It is crucial to help refugees live a life of dignity and purpose....

Inadequate water infrastructure causes a tidal wave of coronavirus in rural Alaska

... ...

Videos

Latest News

Los Angeles County to impose new COVID-19 restrictions on social gatherings

Nearly all social gatherings of individuals from more than a single household will be banned in Los Angeles County for at least three weeks starting Monday under new restrictions local health officials unveiled on Friday, citing a continued...

Recount in Wisconsin county demanded by Trump increases Biden's margin

A recount in Wisconsins largest county demanded by Republican President Donald Trumps election campaign ended Friday with Democratic President-elect Joe Biden gaining votes.After the recount in Milwaukee County, Biden had a net gain of 132 ...

China reports six new COVID-19 cases vs five a day earlier

China on Saturday reported six new coronavirus cases in the mainland for Nov. 27, compared with five cases a day earlier, the health authority said. All of the new infections were imported cases, the National Health Commission said in a sta...

Thailand's pro-democracy protesters warn of possible coup

Pro-democracy demonstrators in Thailand, undeterred by arrest warrants and the possibility of violent attacks, held another rally, poking fun at their critics and warning of the possibility of a military coup. The potential for violence was...

Give Feedback