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European stocks bounce off lows on virus treatment hopes

Credit: REUTERS/STAFF

European stocks bounced from a two-week low on Monday as signs of progress in developing a COVID-19 treatment offset fears about a resurgence in virus cases across the continent that could risk stifling an economic recovery.

By Sruthi Shankar

Aug 24 (Reuters) - European stocks bounced from a two-week low on Monday as signs of progress in developing a COVID-19 treatment offset fears about a resurgence in virus cases across the continent that could risk stifling an economic recovery.

The pan-European STOXX 600 index .STOXX rose 1.3%, mirroring gains for Asian markets after the U.S. health regulator said on Sunday it authorized the use of blood plasma from patients who have recovered from COVID-19 as a treatment.

Spain's Grifols GRLS.MC, one of the world's top producers of treatments based on human plasma, gained 3%.

AstraZeneca Plc AZN.L jumped 2.5% after the Financial Times reported the Trump administration was considering fast-tracking an experimental COVID-19 vaccine being developed by the company.

"The weekend's vaccine news is at the fore," said Keith Temperton, an analyst at Lombard Forte. "But we're in this mid-summer volume vacuum, where the path of least resistance is higher."

Oil and gas companies .SXEP led the surge in Europe, gaining from a rise in crude prices as storms closed in on the Gulf of Mexico, shutting more than half its oil production. O/R

Technology .SX8P, mining .SXPP and chemical .SX4P companies also rose nearly 2%.

British telecoms company BT Group BT.L jumped 4.3% after a media report that its board was preparing to defend it against takeover approaches from rivals and buyout firms.

The gains in European equities come after a lacklustre week that saw data pointing to a stalling business recovery in the euro zone amid a surge in coronavirus cases.

A UK government data showed on Friday the reproduction "R" number of COVID-19 infections had risen and may now be above 1, indicating a risk that the overall epidemic is growing.

Similarly, Germany, France and Spain have seen a surge in virus cases, with their leaders looking at tightening travel restrictions.

"The way we're looking at the COVID narrative seems to be changing. The market is looking at a better situation in terms of hospitalisation and death rates," Temperton said.

Shares in British Airways-owner IAG ICAG.L dropped 0.5% and Air France AIRF.PA dipped 0.4% after the UK government said travellers to France are required to self-certify that they are not suffering coronavirus symptoms or have been in contact with a confirmed case within 14 days preceding travel.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)

((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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