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Europe: Stocks touch 7-week highs, supported by pharmaceutical shares
[LONDON] European stocks climbed to their highest level in seven weeks on Monday, supported by firmer healthcare stocks after Belgian pharmaceuticals group UCB won a favourable US court ruling.
The pan-European STOXX 600 index touched 347.54 points, its highest since late June, before ending flat.
That level was the index's highest since before markets slumped in the immediate aftermath of Britain's shock "Brexit"vote to quit the European Union.
While the STOXX 600 index remains down by around 5 per cent since the start of 2016, it is up by around 12 per cent from a low point reached on June 27 after the Brexit vote.
UCB surged 8.9 per cent after a US court confirmed the validity of a patent related to the Vimpat product, lifting other healthcare stocks. The STOXX Europe 600 Health Care index outperformed the market with a 0.5 per cent rise.
William Hill was the top STOXX 600 faller, down 6.4 per cent after it rejected a revised approach from 888-Rank, saying it continued to see no merit in engaging with the consortium.
Britain's FTSE 100 outperformed continental European shares, as sterling continued to weaken in the wake of new monetary policy easing by the Bank of England.
Hantec Markets' analyst Richard Perry said this month's decision by the Bank of England to cut interest rates to record lows, along with expectations of similar steps from the European Central Bank, were keeping stock markets higher.
Even outside western Europe, equities are on a roll, with Russian shares and Wall Street posting new record highs.
Record low interest rates across Europe have hit returns on bonds and cash, driving investors over to the better returns available from equities and stock market dividend payouts. "We're looking pretty positive. The outlook is supported by continued monetary easing by central banks," Mr Perry said.
Berkeley Futures' associate director Richard Griffiths said a rebound in oil prices was also keeping stock markets on a firmer footing.
Brent crude rose to an August high on Monday, and the STOXX 600 Oil and Gas index ended in positive territory. "Commodities are starting to pick up, and there's a feeling that there's more left in this stock market rally," Griffiths said.