On Thursday, European shares remained close to their 10-month highs, as potential rollouts of the coronavirus vaccine in Europe and hopes of more fiscal stimulus in the United States boosted the case for a global economic recovery. There was a 1% increase in the German DAX, as it reached its highest level since February, while there was a 0.5% increase in the pan-European STOXX 600 index, both of which increased their gains for the fourth straight sessions. France and Germany said that they were ready to start inoculating their citizens in the last week of December with the Pfizer-BioNTech vaccine, once it receives approval from the European Medicines Agency.
Market analysts said that the vaccines were behind the whole rally and without them, the economy wouldn’t be doing as well as it is right now. Every single regulatory approval was going to be helpful in improving the economic recovery. Meanwhile, lawmakers in the US are inching closer to approving a $900 billion coronavirus aid package, while the Federal Reserve stated that it was going to continue to funnel cash until it was certain that the US economy was secure. This comes after more stimulus measures had been introduced last week by the European Central Bank.
The STOXX 600 has managed to reach close to its pre-pandemic levels, thanks to the aggressive monetary support. However, it is still 8% less than its high this year. In October, the economic recovery path had become quite dented due to the rise in COVID-19 cases, which had resulted in more curbs and lockdown measures. However, it had gotten back on track due to vaccine news until the pace was slowed down because of Brexit concerns. There was a 0.3% increase in London’s FTSE 100, as all eyes were focused on a Bank of England meeting that’s scheduled for later in the day.
No changes in the bank’s policies are expected as of now, as everyone awaits the fate of a trade agreement ahead of Britain’s departure from the bloc by December 31st. Market analysts said that there was optimism about a trade deal both in Brexit and the United States. These are the only two prominent issues that are still outstanding this year and it appears that they are on a positive trajectory that could be wrapped up in the next couple of days. There was a 2.9% fall in shares of WPP Plc, as the biggest advertising firm in the world said that it would achieve its 2019 level of net sales by the year 2022.
As there was a rise in price for copper and iron ore, there was a 1.6% jump in the basic materials index. There was a 1.7% increase in Rio Tinto after the minor appointed Jakob Stausholm, the Chief Financial Officer as the next chief executive. There was a 0.8% increase in Novartis after the drug-maker announced its plans of acquiring Cadent, a neuroscience company based in the United States, for a price of $770 million.