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.
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