The European stock markets rebounded sharply on Monday after posting the largest weekly loss in the last three months. The Monday gains are supported by a rally in auto markets along with some recovery in tech stocks. Last week selloff was mostly blamed on US tech stocks.
The declining coronavirus infections along with the prospects of vaccine launch in the coming months added to investor’s sentiments.
Sanofi and GlaxoSmithKline’s coronavirus vaccine is likely to be priced below 10 euros, the president of Sanofi France said. Several other companies are likely to launch their coronavirus vaccine by the end of this year.
The global economies have started recovering at a robust pace. The European auto market grew sharply last month while Chinese auto markets have generated gains in the past four straight months. The low-interest rates are adding to economic and auto sales growth rates.
Wall Street also reported gains on Monday after seeing a big tech selloff last week. However, crude oil prices retreated from $40 level after reports highlighted lower than expected demand forecasts for this year.
“I don’t think this is a start of a downturn in asset prices,” said Robert Greil, chief strategist at Merck Finck Privatbankiers AG in Munich. “We’re only in the first phase of the economic recovery, which makes a major downturn unlikely. Naturally, setbacks are buying opportunities in such an environment.”
Asian and US stock futures are in green on Tuesday as investor’s sentiments increased on economic recovery.
“The headline figures from Friday’s U.S. jobs data were pretty good, so that could lead to speculation policymakers may no longer be eager to dole out trillions of dollars to support the economy,” said Masahiko Loo, portfolio manager at AllianceBernstein.
What Does it Mean for Investors?
- European stock markets started recovering last week’s losses.
- Tech stocks are still under pressure due to lofty valuations.
- US dollar soared while Euro slid slightly.
- British Pound plunged amid expectations for no Brexit trade deal.