European shares gain on vaccine hopes, Atlantia soars
Wed Jul 15 2020
Mark Cooper (2142 articles)

European shares gain on vaccine hopes, Atlantia soars

European shares rebounded on Wednesday from losses in the previous session following reports of progress in developing a COVID-19 vaccine, but a mixed bag of quarterly earnings reports capped gains.

The pan-European STOXX 600 rose 0.9%, with growth-sensitive sectors such as travel & leisure .SXTP, miners .SXPP and industrial companies .SXNP leading gains.

Market sentiment got a boost after U.S. biotech firm Moderna Inc’s (MRNA.O) experimental vaccine for COVID-19 showed it was safe and provoked immune responses in an ongoing early-stage study.

“We have quite an optimistic mood in the market based on not-too-bad earnings reports and the forward-looking optimism about a vaccine,” UniCredit’s lead equity sector strategist Christian Stocker said.

“This is why cyclical stocks are up today.”

As Europe Inc starts churning out trading updates that are expected to show a more than 50% dive, on average, in second-quarter profits, investors are keen to see whether the market bounce back can be sustained.

Swedish telecom operator Tele2 AB gained 3.7% as it reaffirmed its 2020 earnings outlook and plans for an extra shareholder payout.

The world’s largest fish farmer Mowi ASA  jumped 6.4% as harvest volumes beat its own forecast. Shares in peer Salmar (SALM.OL) rose 3%.

The top gainer on the STOXX 600 was Atlantia SpA which shot up 22.5% after the Italian infrastructure group and its unit Autostrade made the government new offers to settle their long-running dispute.

Under the offer, Italy’s state lender Cassa Depositi e Prestiti (CDP) will take a majority stake in Autostrade and the company will be spun off and listed.

Hopes were high among investors heading into a EU summit later this week that leaders will agree on a recovery fund of 750 billion euros for pandemic-hammered economies.

The European Central Bank also starts a two-day meeting although no major announcements are expected when it concludes on Thursday.

Semiconductor equipment maker ASML Holding NV (ASML.AS) slipped 0.6% as it reported quarterly profit below estimates, but forecast overall growth for 2020.

Swedish bank SEB AB (SEBa.ST) fell 2.4% after reporting a smaller-than-expected fall in net quarterly profit, but credit loss provisions surged. Handelsbanken AB (SHBa.ST) also dropped 1.6%.

In UK, fashion brand Burberry Group (BRBY.L) declined 5.5% as it warned second-quarter revenue will remain impacted by the pandemic, but ASOS (ASOS.L) rose 2.8% as it forecast annual profit towards the top end of expectations.

Mark Cooper

Mark Cooper

Mark Cooper is Political / Stock Market Correspondent. He has been covering Global Stock Markets for more than 6 years.

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