European shares rise
European stocks bounced on Monday after sharp losses last week as a selloff in bond markets eased, while optimism over COVID-19 vaccination programme and U.S. stimulus package further aided sentiment.
The European equities benchmark fell to a near one-month low on Friday as investors grew fearful that rising inflation due to another large U.S. stimulus package and the re-opening of the global economy could drive major central banks to tighten monetary policy.
British Airways-owner IAG was the top gainer on STOXX 600, jumping 5.4% after Peel Hunt upgraded the stock to “buy” on expectations of a rebound in travel demand during summer.
After Asian stocks rallied overnight, European share indexes opened higher, with the STOXX 600 up 1.7% at 0837 GMT. London’s FTSE 100 up 1.8% and Germany’s DAX was up 1.3%. The MSCI world equity index, which tracks shares in 49 countries, was up 0.5%, recovering from the previous session’s multi-week low.
The much-anticipated $1.9 trillion COVID-19 relief bill was passed in the U.S. House of Representatives on Saturday, and now moves to the Senate.
Market participants have become wary in recent weeks that, when economies re-open from their coronavirus lockdowns a combination of massive government stimulus and pent-up consumer demand will cause inflation to accelerate.
Factory activity data for February is also in focus this week, with European PMIs due throughout the morning. Manufacturing in Japan grew at its fastest pace in more than two years in February, as strong orders led to the first output rise since the start of the pandemic. China’s factory activity grew at a slower pace than in the previous month, missing market expectations, after COVID-19 related disruptions earlier in the year.
Helping sentiment was news that deliveries of the newly approved Johnson & Johnson COVID-19 vaccine should start on Tuesday.
Oil prices jumped, with Brent crude futures up 1.8% and U.S. West Texas Intermediate (WTI) crude futures up 1.7%.
This article was compiled by BOV Asset Management Limited, a member of the BOV Group. BOV Asset Management,TG Complex, Suite 2, Level 3, Brewery Str., Mriehel BKR 3000. Email: infoassetmanagement@bov.com Internet address: www.bovassetmanagement.com. BOV Asset Management is licensed by the MFSA.