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Travel,Tech Stocks Prop up Europe, Energy Sector Takes Hit

Europe’s STOXX 600 inched higher on Monday as surging travel and technology stocks helped counter losses in the energy sector, with investors focused on Brexit-related developments and central bank actions later this week.

The pan-European STOXX 600 index closed 0.2% higher after rising as much as 0.8% earlier in the session.

Much of those gains were lost as oil majors Total, BP and Royal Dutch Shell dropped after major industry figures said damage to the global economy from the coronavirus pandemic will hollow out demand for oil more than previously thought. [O/R]

Markets had rallied earlier on news that AstraZeneca had resumed clinical trials of its COVID-19 vaccine after being suspended last week.

The British drugmaker's shares slipped amid losses for the healthcare sector, but battered travel and leisure stocks led the gains in Europe, with British Airways-owner IAG jumping 4.4%, and easyJet and Lufthansa rising nearly 2%.

Europe's tech sector rose 0.9%, with chipmakers STMicroelectronics, AMS and ASM International up between 0.9% and 3.7%.

U.S. chipmaker Nvidia Corp said it would buy UK-based chip designer Arm from Japan's SoftBank Group for as much as $40 billion in a deal set to reshape the global semiconductor landscape.

Still euro zone stocks were up just 0.1% and UK's FTSE 100 down 0.1%, with gains for both the euro and sterling hurting the exporters.

“It appears to be becoming much more difficult to separate the optimism around the chatter about progress on a vaccine, with the economic reality that tighter restrictions are likely to curtail the current rebound in economic activity across the bloc,” CMC Market’s Michael Hewson wrote in a note.

Investors waited for UK lawmakers to vote on a bill which the European Union has told London to scrap, raising pessimism over the chances of a Brexit deal being reached before the December 2020 deadline.

Focus was also on this week’s U.S. Federal Reserve meeting, its first since Chairman Jerome Powell unveiled a policy shift toward greater tolerance of inflation.

Britain's G4S soared 25.1% after saying that it had rejected a 2.95 billion pound ($3.8 billion) offer from Canadian security firm GardaWorld, saying it was "highly opportunistic".

Exchange operators were caught in a bidding war, with France's Euronext and Deutsche Boerse down 2.5% and 1.3% after sources told Reuters that Switzerland's Six made the highest bid in the battle for Borsa Italiana.

Reporting by Sruthi Shankar in Bengaluru; editing by Uttaresh.V

Source: Reuters

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