Key European Stock Indices Retreat After Monday Rally
The European stock markets are reversing the positive momentum as investors strated showing concerns over the rising coronavirus cases in the United States and India. European stocks jumped almost 2% last week and extended the gains into the new week. But stocks are retreating in Tuesday trade as investors are unsure whether the economic recovery is sustainable.
The pan-European Stoxx 600 index futures are trading slightly a few points below from Monday close. The rest of the European markets are also in the red. The German DAX, and the U.K. FTSE slipped on Tuesday after generating big gains on Monday. All these indices rose more than 1% on Monday.
The European Stoxx 600 closed 1.6% higher on Monday, thanks to substantial gains from banks and upside momentum from major companies.
The European Commission has provided conditional approval for Gilead’s antiviral drug remdesivir last Friday. It is the first authorized drug that is approved for coronavirus treatment in the European Union.
Bulls believe the economy is likely to recover at a sharp pace once the virus risk subsided.
The recent data has also been pointing strong recovery in consumer’s sentiments. The Davy Research data indicated that the seven-day average of credit and debit card transactions in Ireland stood just 4% below compared to the pre-pandemic level. The report also highlighted that businesses are reopening at a sharp pace. England has reopened pubs and hairdressers over the weekend.
Companies related to the travel and tour sector have also been enjoying gains. Easing air travel restrictions along with declining virus cases in Europe are helping in reopening sporting and tourism activities.
The bears, however, are still showing concerns about the sustained economic recovery in the coming months as circumstances have not been improving in the United States and Asian countries.