European Markets Close Mostly Higher

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European Markets Close Mostly Higher

European markets ended mostly higher on Monday thanks to positive news on the coronavirus vaccine front, and on hopes about a post-Brexit trade deal.

The European Union and the U.K. extended negotiations beyond the Sunday deadlline, with the British Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen agreeing to “go the extra mile” in coming days to reach a deal.

On the vaccine front, the U.S.Centers for Disease Control and Prevention or CDC, gave the approval for Pfizer- BioNTech’s COVID-19 vaccine, following the Emergency Use Authorization or EUA issued by the U.S. Food and Drug Administration. Pfizer commenced first shipments of the vaccine to distribution centers across the country.

Worries about a surge in coronavirus cases across Europe and imposition of tighter restrictions at several places limited market’s gains.

The UK government put London into the country’s toughest tier of Covid-19 restrictions. Germany is set to enter a national lockdown on Wednesday. Nonessential stores, schools and hairdressers have been ordered to close until at least January 10th.

The pan European Stoxx 600 advanced 0.44%. Among the major European markets, Germany and France ended on a firm note, with their benchmark indices DAX and CAC 40 adding 0.83% and 0.37%, respectively. The U.K.’s FTSE 100 slid 0.23% and Switzerland’s SMI ended lower by 0.18%.

Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Iceland, Ireland, Portugal, Spain and Turkey closed higher.

Netherlands, Norway, Poland, Russia and Sweden ended weak.

In the UK market, Next, Melrose, JD Sports Fashion, Natwest Group, Persimmon, Lloyds Banking Group, Ocado, Barclays Group and Taylor Wimpey gained 4 to 6%.

B&M, Kingfisher, Barratt Developments, Smith Ds, Sainsbury J, BT Group, Berkeley Group and Mondi also rose sharply.

Among the losers, AstraZeneca slid 5.7%. The company said it would buy US drugmaker Alexion Pharmaceuticals for $39 billion in its largest ever deal.

Meanwhile, AstraZeneca and Daiichi Sankyo’s trastuzumab deruxtecan has been recommended for conditional marketing authorisation in the EU as a monotherapy to treat metastatic HER2-positive breast cancer. Further, Trixeo Aerosphere has been approved in the EU for maintenance treatment in moderate to severe chronic obstructive pulmonary disease.

Polymetal International ended lower by5.2%. Royal Dutch Shell, BHP Group, Intercontinental Hotels Group, BP and GlaxoSmithkline lost 1.4 to 2.5%.

In Germany, Covestro, Merck, Munich RE, Infineon Technologies, BMW, Fresenius, Daimler, Bayer and Adidas gained 1.5 to 3%.

In the French market, Valeo gained nearly 3%. BNP Paribas, Societe Generale, Credit Agricole, Renault, LVMH, Hermes International, Engie and Peugeot also ended sharply higher.

Vivendi saw some strong buying early on in the session after the company said it has entered into exclusive negotiations with Gruner + Jahr/Bertelsmann to acquire Prisma Media, a French press publishing group.

WorldLine, Unibail Rodamco, Accor, Kering and Technip declined sharply.

In economic news, Eurozone industrial production grew at the fastest pace in three months in October, data from Eurostat showed.

Industrial output expanded 2.1% on a monthly basis, much faster than the 0.1% rise seen in September. On a yearly basis, industrial production dropped 3.8 versus a 6.3% decrease in September. Output was expected to fall 4.4%.

The EU27 industrial production grew 1.9% on month in October but decreased 3.1% from the same period last year.

Germany’s wholesale prices continued to fall in November driven by weak petroleum product prices, figures released by Destatis revealed.

Wholesale prices declined 1.7% year-on-year in November, but slower than the 1.9% decrease logged in October, the data showed.

Wholesale prices of petroleum products plunged 18.1% on year. Meanwhile, wholesale prices of scrap and residues grew 7.5% and that of grain, raw tobacco, seeds and animal feed climbed 7.2%.

On a monthly basis, wholesale prices rose 0.1%, in contrast to a 0.2% drop seen in October. This was the first monthly increase in four months.

UK house prices are forecast to log robust growth next year as there is strong evidence that people will continue to have their reprioritised housing needs high on their life agendas, property website Rightmove said Monday. House prices are forecast to climb 4% in 2021.

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