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European Markets Bounce Higher, as Nasdaq Futures Rebound

European stocks gained Wednesday, propelled higher by oil companies and drugmakers, though shares of AstraZeneca PLC fell after it temporarily halted trials of its COVID-19 candidate.

U.S. stock futures also pointed to a bounce later, with technology stocks poised to lead the gains.

The Stoxx Europe 600 index rose 0.7% after a drop of just over 1% on Tuesday. The index has dropped seven of the last nine trading sessions. Elsewhere, the German DAX rose 0.8%, the French CAC 40 rose 0.6% and the FTSE 100 gained nearly 1%.

U.K. stocks got a break from weakness in the British pound, which fell 0.4% against the dollar after the U.K. told the European Union that it is readying preparations to exit from the bloc without any accord.  A weak pound can benefit U.K. companies who derive revenue from overseas as it makes their goods more competitive.

Stock futures pointed to a potential firmer start for Wall Street, with Nasdaq-100 futures up 1.5%. Dow and S&P 500 futures rose around 0.5% each.

The Nasdaq Composite tumbled 4.1% on Tuesday, as electric-car maker Tesla suffered its biggest one-day fall ever. The Dow industrials tumbled 632 points, or 2.3%, and the S&P 500 dropped 2.8%.

“There is yet to be a clear signal that the index has passed an inflection point, although the possibility remains that the pandemic-fuelled rise of the last few months may be easing as the world returns to some sort of normality,” said Richard Hunter, head of markets at Interactive Investor, in a note to clients.

Shares of AstraZeneca PLC fell 1% after the drugmaker paused late-stage trials of its COVID-10 vaccine candidate after one patient became ill, possibly a reaction to the treatment.

”This is a routine action which has to happen whenever there is a potentially unexplained illness in one of the trials, while it is investigated, ensuring we maintain the integrity of the trials,” the company said in a statement late Tuesday.

“These setbacks are not unusual in trials, and standard review processes trigger pauses to investigate the data,” Stephen Innes, global chief market strategist at AxiCorp, in a note to clients.

Other drugmakers fared better, with shares of Roche Holding AG up 0.8% and GlaxoSmithKline PLC rising 2%.

Gains for major oil companies provided support for major European indexes, with shares of Royal Dutch Shell PLC rising 1.8%, BP PLC up 1.7% and Total SE rose 1%.

Oil prices fell to their lowest settlement since June on Tuesday amid concerns a continued rise in global pandemic cases will dent demand. Crude futures were modestly higher on Wednesday.

Source: Marketwatch


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