Europe: Shares hit eight-month high on renewed vaccine hopes

[BENGALURU] European shares jumped to an eight-month high on Monday after drugmakers Pfizer and BioNTech flagged strong progress in their Covid-19 vaccine, while Joe Biden's election victory raised hopes of a more stable US trade policy.

Pfizer Inc and BioNTech SE said the experimental vaccine was more than 90 per cent effective in preventing Covid-19, based on initial data from a large study.

The pan-European Stoxx 600 jumped nearly 4 per cent and clocked its best day since late March. Travel and leisure stocks, which have been the hardest hit by the pandemic, were among the best performing sectors, adding 7 per cent to hit an eight-month high.

BioNTech's shares jumped more than 15 per cent, while Germany's main stock index added 5 per cent. The index was also boosted by positive trade data for September.

"News on the efficacy of a vaccine is an important piece of the puzzle needed for the global economy and markets to put the Covid-19 recession behind it," said Karen Ward, chief market strategist EMEA at JPMorgan Asset Management.

"Coupled with Biden's win, and a more predictable multilateral approach to issues such as trade and climate change, the stage is set for a more balanced return trajectory."

Optimism over a win on Saturday by Democratic candidate Joe Biden in the US election saw European stocks swiftly bouncing back, with the Stoxx 600 trading about 11 per cent higher in November so far.

But a resurgence in virus cases had hit markets hard last month, with the Stoxx 600 losing more than 5 per cent after the UK, Ireland and France all announced new nation-wide lockdowns.

Investor attention has also been on Brexit trade talks, with Britain saying it was open to a "sensible" compromise on fishing and that there was goodwill on both sides to progress towards a trade deal.

The export-heavy FTSE 100 jumped 4.7 per cent, while the British mid-cap index added 5.2 per cent.

In company news, German chipmaker Infineon gained 3.5 per cent as it forecast a nearly 23 per cent jump in revenue in the year ahead.

British homebuilder Taylor Wimpey surged 18.6 per cent after saying it was set to deliver annual results towards the upper end of expectations as the housing market recovered quicker than expected from a coronavirus-led slump.

Volumes for Stoxx 600 were 2.8 times their 90-day daily average by 1706 GMT as investors stormed to equity markets to play the Biden win trade and a positive Covid-19 vaccine update from Pfizer.

REUTERS