European markets close a third week of gains

European stocks ended higher on Friday, with the benchmark STOXX 600 clocking its third straight week of gains as a jump in commodity-linked stocks helped to counter worries about rising coronavirus cases and an impasse over new U.S. stimulus.

The pan-European STOXX 600 index rose 0.5%. The oil & gas sector also jumped 1.5% as crude prices were buoyed by successful COVID-19 vaccine trials.

Data from Bank of America showed investors pumped $27 billion into equity funds last week as positive COVID-19 vaccine updates led to euphoric buying of shares in worst-hit sectors such as banks, travel and leisure, and oil. These sectors were among the top performers this week as investors bet a vaccine will revive economic growth faster but worries about coronavirus shutdowns took the shine off a rally in these so-called value stocks.

Markets were also nervous about further stimulus for the U.S. economy after Treasury Secretary Steven Mnuchin said key pandemic lending programmes at the Federal Reserve would expire on the 31 December, putting the outgoing Trump administration at odds with the central bank.

Investor sentiment was also hit by data that showed COVID-19 hospitalisations across the United States jumped by nearly 50% in the last two weeks, threatening the recovery of the world’s largest economy as cities and states began to impose lockdowns.

California on Thursday imposed a curfew on social gatherings and other non-essential activities in one of the most intrusive of the restrictions being ordered across the country to curb an alarming surge in infections.

The UK's FTSE 100 rose 0.3% as retail sales bounced in October and the British health minister said there were encouraging signs that virus cases were starting to flatten. There was optimism on the Brexit front, with an EU official pointing to progress on “important files” as Britain negotiates on a future trading relationship with the European Union.

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.