European stocks edged higher on Tuesday as investors took heart from the U.S. Food and Drug Administration’s full approval of the Pfizer/BioNTech vaccine and calming worries about imminent tapering from the Federal Reserve.
The pan-European Stoxx 600 climbed 0.4% in early trade, with travel and leisure stocks adding 1.1% to lead gains as all sectors and major bourses entered positive territory.
Shares in Asia-Pacific also rose in Tuesday’s trade, following suit from the U.S. on Monday as the tech-heavy Nasdaq Composite jumped to a record close on the back of the FDA’s vaccine approval.
Focus for global investors this week remains on the Fed’s Jackson Hole symposium, which takes place virtually on Thursday, where policymakers could detail their plans for tapering the central bank’s $120 billion a month bond buying program. Fed Chairman Jerome Powell will deliver a speech on Friday.
On the data front, German GDP grew by 1.6% in the second quarter adjusted for price, seasonal and calendar effects, the country’s Federal Statistics Office revealed Thursday.
The expansion slightly outpaced the office’s previous estimate of 1.5% growth, and was driven primarily by consumers and state spending.
Investors continue to keep one eye on the situation in Afghanistan. Reuters reported that G-7 (Group of Seven) leaders are expected the seek a unified decision on Tuesday as to whether or not to recognize the Taliban’s leadership, and whether to impose sanctions on the organization.
In corporate news, Morrisons shareholder Legal & General said Monday that a new agreed $9.54 billion takeover bid for the British supermarket chain from private equity group CD&R is a more accurate reflection of its true value.
Rival Sainsbury’s is also the source of speculation, with the company’s stock soaring Monday following a report that private equity firms could launch offers of more than $9.6 billion.
Sainsbury’s shares slipped 2% in early trade Tuesday as some investors seemingly cashed in on Monday’s 14% surge.
At the top of the European blue chip index, fellow British retailer Marks & Spencer climbed 3% after price target increases from Credit Suisse and Berenberg.