LONDON – European equities rose sharply on Monday as global markets rose as US Treasury yields declined and were fueled by positive news on the coronavirus vaccine front.
The pan-European Stoxx 600 rose 1.7% in early trade, with core resources adding 2.7% to drive gains as all major sectors and stock markets entered positive territory.
The sharp rise in European markets comes after US stock futures rose sharply in overnight transactions as Treasury yields continued to fall from their highs last week. Shares have been under pressure for the past few weeks as rising yields have made stocks seem less attractive to investors.
The major averages rose for February, supported by a strong earnings season, positive news about the launch of vaccines and the hope of another stimulus package. The House early Saturday passed a $ 1.9 trillion Covid bailout bill, the U.S. bailout law of 2021. The Senate will now consider the legislation.
More positive news on the Covid-19 vaccine has also surfaced this weekend, as the U.S. Centers for Disease Control and Prevention advisory group voted unanimously Sunday to recommend the use of the Johnson & Johnson Covid-19 one-shot vaccine for people aged 18 and older. The company expects to initially deliver 4 million doses.
Meanwhile, in Asia-Pacific, shares traded higher on Monday, despite data releases showing that the slowdown in China’s production activity slowed in February.
China’s official Procurement Producers Index (PMI) for February reached 50.6 over the weekend, according to data from the country’s National Bureau of Statistics. This was lower than the January reading of 51.3, but still above the level of 50 that separates the contraction expansion.
A private poll released on Monday also showed that China’s production activity in February is growing at a slower pace.
In Europe on Monday, gains came from Bunzl and the Bank of Ireland, and a number of communications include manufacturing PMI data, UK mortgage approval data and inflation figures from Italy and Germany.
In terms of individual stock price movements, British builder Persimmon and parent company British Airways, IAG, climbed more than 5% in early transactions to lead the European blue chip index.
– Maggie Fitzgerald and Eustance Huang from CNBC contributed to this market report.
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