European shares climb on progress with possible Covid-19 vaccine

European shares rose on Monday, although the Iseq underperformed, as progress on a possible Covid-19 vaccine, some upbeat earnings reports and stimulus talks fed into hopes of an economic recovery from the coronavirus-induced downturn.

Dublin

The Iseq all-share index rose 0.68 per cent on Monday with Ryanair and Flutter Entertainment boosting the index.

Irish banks got another kicking on the day as investors await earnings reports from US heavyweights this week. AIB closed 1.26 per cent lower at €1.09 while Bank of Ireland dropped 0.85 per cent to €1.74.

News over the weekend that Tánaiste Leo Varadkar is to meet the banks' chief executives this week amid an escalating row over the charging of interest to mortgage customers who have availed of Covid-19 payment breaks is unlikely to have helped.

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Budget airline Ryanair was amongst gainers after JP Morgan upgraded its stance on the stock to outperform. Although it lowered the price target for Ryanair from €16.75 to €15.30. The airline rose 2.38 per cent to €10.75.

Flutter Entertainment closed up 2.8 per cent at €122.00, although there was little in the way of stock specific news.

As the volume of Covid-19 cases in the US ticks up, some stocks with exposure to the country fell. Index heavyweight CRH slipped 0.3 per cent to €32.22.

Meanwhile, housebuilders were weak with Cairn Homes declining 2.79 per cent to €0.87 and Glenveagh Properties falling 2.19 per cent to €0.71.

London

British stocks closed higher on Monday, recovering from the prior week’s losses as the focus turned to the upcoming second-quarter earnings season, although a continued rise in coronavirus cases kept sentiment subdued.

The blue-chip FTSE 100 closed 1.3 per cent higher, pushed up by heavyweight mining stocks Rio Tinto and BHP Group . The two will be the first among their peers to release quarterly production data later in the month. A recent rise in metal prices, particularly copper, has also improved the prospects of major miners.

The mid-cap FTSE 250 added 1.2 per cent for the day.

Private security company G4S rose 9.3 per cent after it said it could axe 1,150 jobs at its UK cash business as it grapples with an increased shift to digital payments triggered by the coronavirus lockdown.

Europe

The pan-European Stoxx index rose 1 per cent, with miners gaining 1.7 per cent on optimism over China’s recovery and surging metal prices.

Other growth-oriented sectors such as travel and leisure, banks, technology stocks and oil & gas rose between 1.9 per cent and 1.4 per cent.

Nordic bank DNB rose 9.9 per cent after an earnings beat.

Finnish valves maker Neles surged 37.6 per cent and hit a record high after Swedish industrial group Alfa Laval announced a recommended €1.73 billion cash bid.

Meanwhile, Atlantia slumped 15.2 per cent after Italy's prime minister dismissed the toll road operator's bid to keep its lucrative toll road concession.

French video games group Ubisoft fell 5 per cent as it announced staff departures after a review in response to allegations of misconduct at the company.

New York

Shares of German biotech company BioNTech jumped 19.6 per cent and Pfizer climbed 4.2 per cent as two of their experimental coronavirus vaccines received the US FDA's "fast track" designation.

Merger news also perked up investors as Analog Devices announced a $21 billion deal to buy rival Maxim Integrated Products, whose shares rose 11.4 per cent. Analog shares fell 3.4 per cent.

PepsiCo gained 2.2 per cent as it benefited from a surge in at-home consumption of salty snacks such as Fritos and Cheetos during lockdowns.

Tesla jumped 14.4 per cent to $1,767.26, building on a rally of nearly 25 per cent in the past two consecutive weeks. Over the weekend, it slashed the price for its Model Y SUV.

– Additional reporting: Reuters