European shares at eight-months high

Stock markets and commodities continued to push higher on Tuesday, after the euphoria of a coronavirus vaccine had sent global equity indexes soaring to an all-time high and shaken bond yields higher.

Having surged 4% on Monday on the vaccine breakthrough from U.S. and German drugmakers Pfizer and BioNTech there was little surprise that Europe saw the pace drop, though things were still moving forward. European shares hovered at eight-month highs on Tuesday on optimism around signs of a breakthrough in developing a COVID-19 vaccine, although concerns about the depth of the economic damage from the pandemic capped gains.

The pan-European STOXX 600 was up 0.2% by 0804 GMT, after rallying 4% in the previous session, as U.S. drugmaker Pfizer Inc said its COVID-19 vaccine, developed with German partner BioNTech SE, was more than 90% effective in preventing the infection.

Banking, travel and leisure, and energy stocks were among the biggest gainers in early trading following gains of more than 7% on Monday.

Asian markets had been playing catch-up overnight having been closed when Monday’s news of the vaccine broke, although like Wall Street overnight, they had lost momentum by the end of the session.

Particularly encouraging was that the vaccine’s trials had shown it to be more than 90% effective in preventing infection, much higher than expected and, for example, current flu vaccines.

Japan’s Nikkei 225 ended up nearly 0.3% after being 1.1% higher in early trading which set a new 29-year high. There was weakness in China, though, with the CSI300 Index slipping 0.6%. Analysts attributed the decline to the heavy exposure of China’s indices to tech stocks, which came under pressure as investors eyed less consumer reliance on technology if a vaccine leads to an easing of movement restrictions.

The vaccine optimism was shared across all asset classes. Oil prices were edging higher again in London trading after posting the biggest one-day percentage gain in five months on Monday.

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.