Markets

European Stocks Close Higher On Vaccine Hopes, Stimulus Optimism

(RTTNews) - European markets closed higher on Monday, as stocks gained in strength after a weak start, amid optimism about a potential coronavirus vaccine and on hopes the EU leaders will eventually agree on the size and composition of a proposed recovery fund.

European Council President Charles Michel has proposed a new figure of €390 billion in grants combined with smaller rebate, as against an initial proposal of €400 billion. Still, the size is higher than the €350 billion proposed by countries including Austria, Denmark, Sweden, and the Netherlands.

According to a report in medical journal The Lancet, a potential coronavirus vaccine developed by Oxford University with AstraZeneca seems to be safe and has produced strong immune response in early-stage human trial.

The pan European Stoxx 600 moved up 0.75%. Among the major markets in Europe, Germany and France ended pretty stronger, with their benchmarks DAX and CAC 40 advancing 0.99% and 0.47%, respectively. Switzerland's SMI ended up 0.58%. The U.K.'s FTSE 100 slid 0.46% as rising tensions between the U.K. and China after the British government suspended its extradition treaty with Hong Kong weighed on stocks.

Among other markets in Europe, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Spain, Sweden and Turkey closed with sharp to moderate gains, while Austria and Iceland ended weak.

In the German market, SAP gained nearly 2.5%. Infineon Technologies, Adidas, Merck, Siemens, Deutsche Bank, Allianz and RWE advanced 1.4 to 2%. Munich RE and Vonovia also ended notably higher.

Wirecard shares plunged more than 19%. Lufthansa ended nearly 2% down, while Bayer, Daimler and BMW lost 1 to 1.2%.

In France, Dassault Systemes Group shares surged up 3.75%. Engie, STMicroElectronics, Worldline and Renault gained 2 to 2.3%, while Saint Gobain, Atos, Sanofi, Hermes International, Danone, Orange and Vivendi gained 1 to 1.6%.

Accor lost about 2.6%, while Publicis Groupe and Total both ended lower by about 1.85%.

In economic news, Germany's producer prices declined for the fifth consecutive month in June but the pace of annual fall decreased, data from Destatis revealed Monday. Producer prices fell 1.8% year-on-year in June, slower than the 2.2% decrease seen in May. Prices have been falling since February. Nonetheless, this was faster than the 1.6% rise economists had forecast.

On a monthly basis, producer prices remained unchanged versus a 0.4% drop in May. Economists had expected a 0.2% rise.

The euro area current account surplus declined in May largely reflecting the widening deficit on the secondary income, data from the European Central Bank showed. The current account surplus fell to EUR 8 billion in May from EUR 14 billion in April. In the same period last year, the surplus was EUR 23 billion.

The trade surplus rose to EUR 17 billion from EUR 13 billion in April. Meanwhile, the surplus on services fell to EUR 4 billion from EUR 5 billion.

Primary income decreased to EUR 5 billion from EUR 8 billion a month ago. At the same time, the deficit on secondary income widened to EUR 18 billion from EUR 12 billion.

In the twelve-month period to May, the current account recorded a surplus of EUR 264 billion or 2.2 percent of euro area GDP, compared with a surplus of EUR 318 billion, or 2.7 percent of GDP in the twelve months to May. During twelve months to May, the cumulative surplus on the financial account declined to EUR 241 billion from EUR 334 billion in the same period a year ago.

UK house prices increased in July suggesting that a mini-boom is gathering momentum, property website Rightmove said. Asking prices increased 3.7% year-on-year to GBP 312,625 in July. This was the highest rate since December 2016. Prices gained 2.4% from March pre-lockdown period.

The number of monthly agreed sales was up 15% from last year. Further, in the five days after the stamp duty announcement it jumped to 35% up on the same days a year ago. Further, buyer inquiries surged 75% from the same period last year.

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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