LONDON — European stocks closed sharply higher on Monday as global markets rallied on falling U.S. Treasury yields and positive news on the coronavirus vaccine front.
The pan-European Stoxx 600 ended the session up by 1.8%, with travel and leisure shares climbing 3.2% to lead gains as all sectors and major bourses entered positive territory.
The sharp rise for European markets comes as Treasury yields continue to retreat from their highs from last week. Equities had been under pressure over the last few weeks as rising yields made equities look less attractive to investors.
On Wall Street, stocks rose sharply as traders also monitored the bond markets. The House passed a $1.9 trillion Covid relief 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 as the U.S. Centers for Disease Control and Prevention advisory panel voted unanimously Sunday to recommend the use of Johnson & Johnson‘s one-shot Covid-19 vaccine for people 18 years of age and older. The company expects to ship out 4 million doses initially.
February’s final IHS Markit manufacturing PMI (purchasing managers’ index) reading for the euro zone came in at 57.9, up from a flash estimate of 57.7.
Travel shares were the outperformers Monday, with British Airways parent IAG and cruise operator Carnival climbing around 5% and 7% respectively.
British housebuilders Taylor Wimpey, Berkeley Group Holdings and Persimmon all rallied more than 5% ahead of Wednesday’s U.K. budget and reports that U.K. Finance Minister Rishi Sunak could introduce a new mortgage guarantee scheme.
At the bottom of the index, Danish insurer Tryg fell 5% after a rights issue.
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