European Stocks Flying Higher After Two Straight Weeks of Gains
European stocks have started the week with gains as hopes over the US stimulus program rose once again after President Donald Trump stated that talks are going well with Democrats.
The President has called off talks early last week but also tweeted that he wants to give $1200 to each American. Speaker of the House Nancy Pelosi also said on Thursday that she still wanted a big deal.
Trump tweeted: “Covid Relief Negotiations are moving along. Go Big!”
Economic data has also been adding to the trader’s sentiments. China, the second-largest economy, has been showing aggressive economic growth over the past couple of months.
Chinese services-sector activity increased at a higher than the anticipated pace in September while industrial production has been generating big gains compared to the past year period. The second-largest economy reported a 19% increase in industrial profit for the month of August.
“EU stocks will continue to be fuelled by U.S. stimulus hopes and expectations of a ‘blue wave’ that is currently viewed as a stimulus friendly outcome at the November U.S. election,” said Stephen Innes, chief global market strategist at AxiCorp.
“The recent rise in COVID-19 cases in Europe/ and tighter restrictions continued to generate lots of headlines but not much market reaction,” Stephen Innes added.
European stocks also received support from the robust gains from the oil & gas sector along with a rebound in travel and leisure stocks. Airline companies are among the biggest gainers. For instance, the stock price of Rolls Royce doubled since last Monday, while the shares of IAG grew 13.2% on Friday.
Pandora, the jewelry maker, raised its forecast for the quarterly revenues amid improving demand and strong growth in online sales.
The USD index, which tracks the greenback against the other major currencies, fell back to around 93 levels amid a rally in risker assets. Euro also surged against the US dollar.