Eurozone shares hit March highs on EU deal optimism

Credit: REUTERS/STAFF

Eurozone shares hit their highest since early March on Tuesday after European Union leaders agreed on a landmark stimulus package to revive member states from a coronavirus-induced slump.

By Sruthi Shankar

July 21 (Reuters) - Eurozone shares hit their highest since early March on Tuesday after European Union leaders agreed on a landmark stimulus package to revive member states from a coronavirus-induced slump.

An index of eurozone stocks .STOXXE rose 1.3% to touch its highest level since March 5.

The broader pan-European STOXX 600 .STOXX gained 1%, also hovering near March 5 high, amid growing optimism about a COVID-19 treatment after promising early data from trials of three potential vaccines.

EU leaders clinched a "historic" deal in the early hours of Tuesday, after a fractious summit that lasted almost five days.

They hope the 750-billion-euro recovery fund and its related 1.1-trillion-euro 2017-2021 budget will help against the continent's deepest recession since World War Two.

"Of course, there were compromises and it is not perfect but the fact that the 27 leaders gave their seal of approval to the EU jointly issuing debt was the proverbial Rubicon being crossed that investors were watching the most avidly," Sean Darby, global equity strategist at Jefferies, wrote in a note.

Darby noted that aside from Italy and other southern states being the biggest beneficiaries, environment friendly companies will also benefit from the budget.

Blue-chip equities indexes of Spain .IBEX and Italy .FTMIB gained 1.7% and 2.0% respectively, while eurozone banks .SX7E jumped 3.3%.

A gauge of European stock market volatility .V2TX sank to its lowest since Feb. 25.

Germany's DAX .GDAXI surged to its highest since Feb. 24, boosted by tech major SAP SE SAPG.DE.

Bayer AG BAYGn.DE rose 1.9% after a California appeals court reduced the amount of damages by 74% in a case claiming its Roundup weed killer caused cancer.

Logitech International SA LOGN.S rose 3% after the maker of computer peripherals raised its outlook for fiscal 2021.

Premium spirits maker Remy Cointreau SA RCOP.PA gained 3.8% after it posted better-than-expected sales, due to resilient consumption in the United States and Britain.

(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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