LONDON – European stocks rallied higher on Tuesday, with investors focusing on an emerging battle between vaccine maker AstraZeneca and the EU, and political uncertainty in Italy.
The pan-European Stoxx 600 soared 0.3% above the early trading flatline, with financial services adding 1.3%, while travel and leisure stocks fell 0.9%.
The British-Swedish drug company AstraZeneca has been accused by the EU of not doing enough to resolve a dispute over the number of doses it can deliver to the block. The AstraZeneca vaccine has not yet been approved by the European Medicines Agency, but is expected to be imminent. AstraZeneca said last week that it is facing manufacturing problems.
In other coronavirus news, Moderna said on Monday that work is accelerating on a Covid-19 booster shot for the recently discovered variant in South Africa. The company’s researchers said the current coronavirus vaccine appears to be working against the two highly communicable strains found in the UK and South Africa.
Italian stocks will be watched closely on Tuesday as a new political crisis comes to the fore. Prime Minister Giuseppe Conte is expected to step down on Tuesday after a morning cabinet meeting and will attempt to lead a new mandate. The move comes after weeks of tension between Conte and Matteo Renzi, the head of a junior coalition party in the government.
Elsewhere, US equity futures fell slightly Tuesday morning as Wall Street geared up for the heart of corporate earnings; General Electric, Verizon and Johnson & Johnson are expected to report results before the bell, while technology giant Microsoft will report its second-quarter fiscal results after the bell. In Asia-Pacific, shares fell during Tuesday’s trading.
Earnings remain in focus, with UBS reporting net profit of $ 1.71 billion for the fourth quarter of 2020 on Tuesday, up 137% from the year before and significantly exceeding analyst expectations of $ 967 million, Refinitiv said . The share of the world’s largest asset manager rose 4% during early trading.
Largest movers
Spanish utility Naturgy saw its shares rise by more than 15% in early trading after the IFM Global Infrastructure Fund made a EUR 5 billion ($ 6.06 billion) bid for a stake in the company.
Shares of EQT rallied more than 10% after the Swedish private equity firm exceeded full year earnings expectations and agreed to buy Exeter Property Group.
At the lower end of the European blue chip index, Rolls-Royce shares fell more than 8% after the aero engine maker revised its 2021 outlook amid new travel restrictions from Covid-19.