By Barbara Kollmeyer
European stocks climbed on Wednesday, driven by continued hopes over COVID-19 vaccines, and further hints from European Central Bank President Christine Lagarde about policy easing next month.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.20% rose nearly 1%, for its third straight win. The German DAX index /zigman2/quotes/210597999/delayed DX:DAX +0.30% and French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +0.08% rose 0.4% each and the FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +0.32% rose 0.9% each.
Monday marked a nearly 4% gain for the Stoxx 600 and the biggest one-day rise since March, with the index up another 0.9% on Tuesday.
U.S. stocks rose at the start of trading , with technology stocks rebounding from a recent selloff as investors continued to rotate out of technology and into cyclical names well placed to benefit from an economic recovery.
Monday’s news from drugmaker Pfizer /zigman2/quotes/202877789/composite PFE -0.14% and partner BioNTech /zigman2/quotes/214419716/composite BNTX -4.02% — that their COVID-19 vaccine candidate was more than 90% effective in preventing the disease in preliminary results — has fueled gains for stocks geared to a recovery from the pandemic.
Shares of International Consolidated Airlines /zigman2/quotes/208070069/delayed UK:IAG +2.18% , which operates British Airways, was among Wednesday’s best performers in Europe, up nearly 7%.
But caution was heard from ECB President Lagarde on Wednesday, as she made comments to the bank’s Forum on Central Banking.
“While the latest news on a vaccine looks encouraging, we could still face recurring cycles of accelerating viral spread and tightening restrictions until widespread immunity is achieved,” Lagarde reportedly said, as she described a “unsteady, stop-start recovery” that hinges on the timing of a vaccine rollout.
The ECB said at its meeting in late October that it would “recalibrate” its monetary policy tools at its next meeting on Dec. 10. The region has been dealing with a second wave of COVID-19 that has even swept up Germany. Many countries have been forced back into lockdowns and curfews.
Banks fell in Europe, led by shares of ABN Amro /zigman2/quotes/209088556/delayed NL:ABN -1.30% , which tumbled more than 5% after the Dutch bank’s results. The bank reported higher third-quarter earnings , boosted in part by lower impairments, but analysts focused on a sharp fall in net interest income.
Net interest income for ABN slumped 10%, and was guided to trend down further in 2021, noted Suvi Platerink Kosonen, analyst at ING, in a note to clients.
Shares of Rolls-Royce /zigman2/quotes/203646520/delayed UK:RR +2.21% slumped 8%, with the engineering company giving back all of a 7% surge on Tuesday.
Shares of Continental /zigman2/quotes/206791451/delayed XE:CON +0.17% slid over 5% after the German car-parts supplier provided new guidance for 2020 and said that it expects lower sales and a smaller adjusted earnings margin.
Pharmaceutical names were up across the board, with AstraZeneca /zigman2/quotes/200304487/composite AZN +0.10% /zigman2/quotes/203048482/delayed UK:AZN +1.53% up 2.3% and Novartis /zigman2/quotes/203243705/composite NVS +1.07% /zigman2/quotes/203286410/delayed CH:NOVN +0.59% up over 1% each, and Roche Holding /zigman2/quotes/206324342/delayed CH:ROG +0.48% gaining nearly 3%.
Renewable energy group Siemens Gamesa Renewables Energy /zigman2/quotes/205820667/delayed ES:SGRE +1.38% climbed 7%. Elsewhere utilities got a boost, with EDP Renovaveis /zigman2/quotes/205832062/delayed UK:0ML1 +0.43% also up 7%, and Électricité de France /zigman2/quotes/201783867/delayed FR:EDF +1.98% climbing 4.5%.