European stocks close higher on positive vaccine results

Published On: July 21, 2020Categories: Stocks & Shares2 min read

The pan-European Stoxx 600 recouped earlier losses to close over 0.7% higher provisionally

European stocks closed higher Monday as investors reacted to positive results from another coronavirus vaccine candidate.

The pan-European Stoxx 600 recouped earlier losses to close over 0.7% higher provisionally. Construction and material firms led the gains with a 1.4% rise, with most sectors and major bourses in positive territory.

A potential coronavirus vaccine developed by the U.K.’s Oxford University with AstraZeneca appears to be safe and has produced a strong immune response in a large, early-stage human trial, according to results published Monday in the medical journal The Lancet.

The experimental vaccine combines genetic material from the coronavirus with a modified adenovirus known to cause infections in chimpanzees. Shares of AstraZeneca rose more than 1% following the release of the findings.

Some other promising news came out of the U.K. Monday as British pharmaceutical company Synairgen claimed that its new respiratory coronavirus treatment has reduced the number of hospitalized Covid-19 patients needing intensive care in a clinical trial.

Britain’s FTSE 100 was the only major index firmly in the red, with tensions between the U.K. and China weighing on sentiment. U.K. Foreign Secretary Dominic Raab announced the suspension of the country’s Hong Kong extradition treaty on Monday, in response to Beijing’s new national security law in the former British colony.

Meanwhile, European investors also monitored EU talks about a proposed 750 billion euro ($857 billion) recovery fund. Negotiations that began in Brussels on Friday have continued into Monday, with German Chancellor Angela Merkel and French President Emmanuel Macron voicing cautious hopes that a compromise can be reached.

On Wall Street, stocks were mixed with the Dow Jones Industrial Average falling 0.2% while the Nasdaq climbed over 1% as Amazon led other major tech stocks higher. A Goldman Sachs analyst hiked his price target for the e-commerce giant to $3,800 per share, the highest on the Street.

The pandemic remains a focus for markets as coronavirus cases rise at an alarming rate in some parts of the world. Data compiled by Johns Hopkins University showed more than 70,000 cases were confirmed in the U.S. on Saturday, marking two straight days of at least 70,000 new infections being confirmed.

In Europe, Ubi Banca rallied 14% after Intesa Sanpaolo increased its takeover bid for the smaller Italian lender. Shares of Philips rose over 5% after the health tech firm posted better-than-expected results.

At the other end of the European blue chip index, Natixis shares dropped more than 7% after owner BPCE said it did not intend to file a tender offer for more shares of the French corporate bank.

About the Author: Jonathan Adams

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