European shares gain on vaccine hopes, Atlantia soars

Credit: REUTERS/KAI PFAFFENBACH

European shares rebounded on Wednesday from losses in the previous session following reports of progress in developing a COVID-19 vaccine, but a mixed bag of quarterly earnings reports capped gains.

By Sruthi Shankar

July 15 (Reuters) - European shares rebounded on Wednesday from losses in the previous session following reports of progress in developing a COVID-19 vaccine, but a mixed bag of quarterly earnings reports capped gains.

The pan-European STOXX 600 .STOXX rose 0.9%, with growth-sensitive sectors such as travel & leisure .SXTP, miners .SXPP and industrial companies .SXNP leading gains.

Market sentiment got a boost after U.S. biotech firm Moderna Inc's MRNA.O experimental vaccine for COVID-19 showed it was safe and provoked immune responses in an ongoing early-stage study.

"We have quite an optimistic mood in the market based on not-too-bad earnings reports and the forward-looking optimism about a vaccine," UniCredit's lead equity sector strategist Christian Stocker said.

"This is why cyclical stocks are up today."

As Europe Inc starts churning out trading updates that are expected to show a more than 50% dive, on average, in second-quarter profits, investors are keen to see whether the market bounce back can be sustained.

Swedish telecom operator Tele2 AB TEL2b.ST gained 3.7% as it reaffirmed its 2020 earnings outlook and plans for an extra shareholder payout.

The world's largest fish farmer Mowi ASA MOWI.OL jumped 6.4% as harvest volumes beat its own forecast. Shares in peer Salmar SALM.OL rose 3%.

The top gainer on the STOXX 600 was Atlantia SpA ATL.MI, which shot up 22.5% after the Italian infrastructure group and its unit Autostrade made the government new offers to settle their long-running dispute.

Under the offer, Italy's state lender Cassa Depositi e Prestiti (CDP) will take a majority stake in Autostrade and the company will be spun off and listed.

Hopes were high among investors heading into a EU summit later this week that leaders will agree on a recovery fund of 750 billion euros for pandemic-hammered economies.

The European Central Bank also starts a two-day meeting although no major announcements are expected when it concludes on Thursday.

Semiconductor equipment maker ASML Holding NV ASML.AS slipped 0.6% as it reported quarterly profit below estimates, but forecast overall growth for 2020.

Swedish bank SEB AB SEBa.ST fell 2.4% after reporting a smaller-than-expected fall in net quarterly profit, but credit loss provisions surged. Handelsbanken AB SHBa.ST also dropped 1.6%.

In UK, fashion brand Burberry Group BRBY.L declined 5.5% as it warned second-quarter revenue will remain impacted by the pandemic, but ASOS ASOS.L rose 2.8% as it forecast annual profit towards the top end of expectations.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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