European Stocks Extends Rally into Second Day on Coronavirus Treatment
European stocks soared sharply on Monday amid positive developments related to coronavirus treatment. The Stoxx Europe 600 index grew 1.6% on Monday, with each sector and major bourses reported gains.
The European stock’s rally extended into the second day on coronavirus vaccine hopes. US President Donald Trump announced to use the AstraZeneca coronavirus vaccine on an experimental basis. The President claims that the vaccine would help in returning the economy to normal.
“The drug in question still has a long way to go in terms of development, but the bulls have jumped on the story. Keep in mind that stocks were coming from a low base as markets fell on Friday on the back of the largely disappointing manufacturing and services data from France and Germany,” said David Madden, market analyst at CMC Markets U.K.
Although economic reports last week showed that the economy is growing at a slower pace than expectations, but investor’s sentiments are shifted towards the annual Jackson Hole conference.
Federal Reserve Chairman Jerome Powell is likely to address the conference and outline the central bank’s new inflation strategy. Bank of England Governor Andrew Bailey is also planning to highlight the economic situation during the annual Jackson Hole conference.
US stock markets also soared sharply on vaccine hopes. Wall Street hit a new all-time high, with the S&P 500 and the Nasdaq finished at a new record level.
Travel related companies have generated big gains amid the vaccine hopes. Boeing and airline companies are among the biggest gainers. Asian stock markets also extended the bullish trend into Tuesday trading.
What Does it Mean for Investors?
- US dollar continues trading around 93 levels against the basket of currencies.
- Euro stabilized against the dollar.
- Gold price increased slightly to $1935 an ounce.
- Wall Street futures are in green.
- Annual Jackson Hole conference is a big event for stock market future performance.