LONDON – European stock markets advanced on Tuesday morning as market attention focused on the global economic recovery and the last meeting of the US Federal Reserve.
The pan-European Stoxx 600 added 0.5% at the start of trading, with cars rising 1.9% to drive gains, while oil and gas stocks fell 0.4%.
The market is focused on the Federal Reserve, which begins its two-day meeting on Tuesday, followed by a statement and briefing from President Jerome Powell on Wednesday.
A rise in interest rates and a rise in the US economy have put light central bank policies in the spotlight, and market watchers have questioned when the Fed could consider pursuing such policies.
Later this week, the Bank of England is due to meet on Thursday, and the Bank of Japan will also begin its two-day political meeting that day.
Asia-Pacific markets rose on Tuesday after a relatively sluggish start to global trading week as investors looked forward to the Fed meeting. The US stock index futures index was mixed on Tuesday in premarket trading, after Dow and S&P closed at records amid optimism about economic reopening.
News of the coronavirus vaccine remains in the spotlight in Europe, after Germany became the latest country to suspend the use of the AstraZeneca-Oxford University vaccine on Monday due to concerns about blood clots. The German government has also said it is suspending its use as a precautionary measure, and the vaccine regulator, the Paul Ehrlich Institute, is calling for further investigations.
The World Health Organization, health experts and the vaccine manufacturer have tried to minimize continuing safety concerns, saying there is currently no evidence to suggest a link between shooting and the increased risk of developing blood clots. The European Medicines Agency shall carry out investigations.
The biggest engines
Tuesday’s gains came from VW, RWE, Zalando and Greggs on Tuesday.
Volkswagen aims for an operating margin of 5% -6.5% this year and 7% -8% in the coming years, as it seems to reduce costs and an ambitious expansion in the electric vehicle market.
“In the next 15 years we will see a total turnover of the industry. Electric cars take the lead and then the software really becomes the main engine of the industry,” CEO Herbert Diess told CNBC on Tuesday.
Shares of the world’s second-largest carmaker gained 4.5% at the start of trading, while German carmaker Varta rose 6.5% to lead the Stoxx 600.
Zalando and the French telecommunications company Iliad both gained more than 5% after strong results throughout the year.
At the bottom of the European blue chip index, the German biotech company MorphoSys fell by more than 11% after its revenue ratio.
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