LONDON – European equities rallied on Monday as global markets recovered from declining U.S. Treasury yields and boosted by positive news on the coronavirus vaccine front.
The pan-European Stoxx 600 jumped 1.7% in early trading, with base assets adding 2.7% to drive profits as all sectors and major exchanges entered positive ground.
The sharp rise for European markets comes after US equity futures rallied during overnight trading as government bond yields continued to retreat from last week’s highs. Shares have been under pressure in recent weeks as rising interest rates have made stocks appear less attractive to investors.
The main averages rose for February, supported by a strong earnings season, positive news from the introduction of vaccines and hopes for a different stimulus package. The House passed a $ 1.9 trillion Covid bill, the American Rescue Plan Act of 2021, early Saturday. The Senate will now consider the legislation.
More positive news on the Covid-19 vaccine front also emerged this weekend when the advisory panel of the U.S. Centers for Disease Control and Prevention voted unanimously on Sunday to recommend the use of Johnson & Johnson’s one-time Covid-19 vaccine for people aged 18 and over. older. The company initially expects to ship 4 million doses.
Meanwhile, Asia-Pacific stocks traded higher Monday, despite data showing Chinese manufacturing activity growth slowed in February.
China’s official purchasing managers index (PMI) for manufacturing in February came in at 50.6 this weekend, data from the country’s National Bureau of Statistics showed. That was below the January reading of 51.3, but still above the 50 level that separates expansion from contraction.
A private poll released Monday also showed that China’s manufacturing activity grew at a slower pace in February.
Monday in Europe, revenues came from Bunzl and Bank of Ireland, and a large number of data releases include manufacturing PMI data, UK mortgage approval data and inflation data from Italy and Germany.
In terms of individual stock price movements, British home builder Persimmon and British Airways parent company IAG both climbed more than 5% in early trading to lead the European blue chip index.
CNBC’s Maggie Fitzgerald and Eustance Huang contributed to this market report.
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