Europe midday: Shares continue surge on Covid vaccine optimism
European shares continued to power ahead on Tuesday, driven by optimism over a coronavirus vaccine and positive China data.
The pan-European STOXX 600 index was up 0.75%, after a record-breaking run in November. London’s FTSE 100 rose 1.95%, while the German DAX was up 0.92% and France’s CAC 40 climbed 1.04%. US futures were higher, with the Dow Jones up 301 points.
Chinese factory activity accelerated at the fastest pace in a decade in November, according to a private sector survey that the economy was returning to pre-pandemic levels.
The Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) rose to 54.9 from October’s 53.6, marking the highest level since November 2010.
News that Moderna’s Covid-19 vaccine was 94% effective also helped to drive markets upwards. Its treatment along with that of Pfizer/BioNTech are expected to be given emergency use authorisation in the UK, US and elsewhere this month.
However, sentiment was slightly tempered by Brexit talks, where the UK was digging its heels in over the symbolic issue of fishing rights, despite the industry making up a small share of the domestic economy.
In equity news, Bank of Ireland topped the gainers, with shares up more than 9%. Barclays and Lloyds were also higher.
French real estate investment company Covivio rose almost 6%.
Royal Mail shares were up almost 3% on an upgrade to ‘hold’ from ‘sell’ by Liberum.
UniCredit shares slipped sharply again, down 7%, as CEO Jean Pierre Mustier stepped down, with sources citing a rift with the board over strategy for the sudden departure.
"This is a huge blow to the bank, and in particular raises concerns over its governance and decision making processes. There has been speculation that the Italian government were trying to get Unicredit to buy Monte Dei Paschi, a bank that has been in trouble for years now, and whose balance sheet problems are a huge unknown," said Markets.com analyst Michael Hewson.