European Stocks Rise as UK Gives Approval to AstraZeneca Vaccine
On Wednesday, European stocks moved higher, as the United Kingdom granted approval to the COVID-19 vaccine developed by AstraZeneca with Oxford University. Moreover, expectations of more US fiscal aid, along with vaccination efforts on a large scale spurred hopes of a stronger recovery in the pandemic-weakened global economy next year. There was a 0.2% increase in the pan-European STOXX 600, as it hovered close to the six-month high that it had reached in the previous session. There was a fall in the German DAX just ahead of an early close of markets on Wednesday. Most of the region’s markets were subdued because of thin trading volumes in the last week of the year.
There was also a 0.8% increase in shares of AstraZeneca after Britain became the world’s first country to have approved the drugmaker’s vaccine that it had developed jointly with Oxford University. This turned out to be an additional boost for the UK markets after a Brexit trade deal was secured by Britain and the European Union late last week. This helped in averting a chaotic departure for Britain from the bloc at the year-end. There is a vote scheduled for later on Wednesday on the trade agreement in the British parliament.
There was an almost 2% increase in Barclays, Lloyds Banking Group and HSBC, which boosted the blue-chip FTSE 100 of the United Kingdom, as the latter gained by nearly 0.3%. Meanwhile, the hope of the US lawmakers approving a larger stimulus package than expected despite the delays pushed up Wall Street indexes, which managed to achieve all-time highs in this week. Market analysts said that there were some things happening in the market that indicated a strong risk appetite amongst investors. If people are looking towards 2021, then markets are hoping that the multiple coronavirus vaccines will help in counteracting the effects of this pandemic, and hopefully, economic activity will start going back to normal.
There was a 2.7% increase in Spanish lender Unicaja, whereas a drop of 3.1% was reported by Liberbank, after the announcement of an all-in share deal that would help in creating the fifth-biggest bank in the country. This deal marks the acceleration of the consolidation of the sector after a merger had been approved between Caixabank and state-owned Bankia earlier this month. There was a 0.8% increase in the wider banking index, but it has proven to be the worst-performing sectors in 2020, along with the energy sector.
This was mostly because of increasing bad loans due to the havoc wreaked by the pandemic and the appeal for the sector was further hammered by record-low interest rates. Leisure and travel stocks climbed by 0.9%, as the rollout of the coronavirus vaccines throughout Europe took the edge off a sudden increase in infection rates, which are driving a number of countries in considering an extension in their respective lockdowns. It remains to be seen how long it will take for the vaccines to have an impact.