European Markets Close Sharply Higher As U.S. Stimulus Hopes Outweigh China Tensions
The pan-European Stoxx 600 closed 1.7% higher, with all sectors and major bourses in positive territory.Investors appeared unfazed after reports said China had imposed sanctions on 11 U.S. citizens that included Senators Ted Cruz, Marco Rubio, Tom Cotton, Josh Hawley and Pat Toomey. European auto stocks made strong gains after China reported a surge in car sales in July.
European stocks closed higher Tuesday, as investor hopes for a U.S. stimulus deal outweighed concerns over heightened U.S.-Sino tensions.
The pan-European Stoxx 600 closed 1.7% higher, with all sectors and major bourses in positive territory. Autos jumped over 4.4% after China reported a surge in car sales in July, as all sectors and major bourses entered positive territory. But travel and leisure shares were the best performers, up 4.5%.
Risk sentiment on both sides of the Atlantic has been boosted by bets of an incoming U.S. federal stimulus package. Both Republican and Democratic governors across the country on Monday criticized President Donald Trump’s executive orders on coronavirus aid as being too expensive for states already struggling with the cost of the pandemic.
Treasury Secretary Steven Mnuchin and House Speaker Nancy Pelosi have signaled a willingness to return to the negotiating table in the hopes of agreeing on a fresh federal aid package, with Mnuchin suggesting a deal could be in place by the end of the week.
Sentiment was also supported by Russian President Vladimir Putin’s claim that the country had given regulatory approval for the world’s first Covid-19 vaccine. While there was skepticism about whether Russia had developed a safe vaccine so quickly, the news triggered optimism from investors about the race for an inoculation.
Gains in European markets tracked those seen across the globe as investors appeared unfazed after reports said Monday that China had imposed sanctions on 11 U.S. citizens that included Senators Ted Cruz, Marco Rubio, Tom Cotton, Josh Hawley and Pat Toomey.
The U.K. on Tuesday reported its largest quarterly fall in employment for over a decade, with 220,000 fewer people in work between April and June than in the first quarter.
In terms of individual share price action, German travel group Tui jumped nearly 10% to lead the Stoxx 600 amid a broader climb in travel shares. Vestas Wind Systemsmeanwhile climbed more than 9% after the company missed profit forecasts but restored its full-year guidance.
At the bottom of the European blue-chip index, gold miner Centamin fell over 7% after a downturn in spot gold prices.
– CNBC.