(Reuters) – European stocks rebounded in the first trading session of the year on Monday, as a landmark Brexit trade deal and coronavirus vaccination campaigns across the continent raised expectations for a strong economic rebound.
The pan-regional STOXX 600 index gained 0.7% to new highs in February 2020, with economically sensitive mining surging by more than 3%.
German-listed shares in the world’s largest vacation company, TUI, rose 2.7% after its chief executive told a newspaper he expected “a largely normal summer” this year.
The German DAX rose 0.1% after a long weekend to trade below all-time highs, while the French CAC 40 added 0.7%.
Global stocks have hit record highs, with the STOXX 600 recovering about 50% from its March 2020 low as investors put their hopes in coronavirus vaccines to fuel a rapid economic rebound.
Britain began vaccinating its population with the COVID-19 vaccine developed by the University of Oxford and AstraZeneca on Monday.
“The distribution of the AstraZeneca-University of Oxford COVID-19 vaccine is also behind the wider positive movement in European equities,” said David Madden, market analyst at CMC Markets in London.
Adding to the optimistic sentiment, an investigation showed German factories produced more goods in December despite a tighter lockdown to prevent a rise in coronavirus deaths.
The IHS Markit final purchasing managers index (PMI) for the manufacturing sector rose to 58.3 from 57.8 the previous month.
London’s blue chip index gained 1.7% on its first day of trading with Britain outside of the European Union’s orbit.
Although the hotly contested trade deal reached in late December sets rules for sectors such as fisheries and agriculture, it did not cover the UK’s much broader financial sector, meaning automatic access to EU financial markets ended on December 31.
Shares of UK banks such as Lloyds Banking Group, Barclays and Natwest fell between 0.7% and 3%, while the European banking index as a whole fell 0.8%.
On a positive note, however, Ladbrokes owner Entain Plc jumped 25.3% after confirming a proposed $ 11 billion bid from US casino operator MGM Resorts, which he said considerably undervalued its activity.
UK betting companies like Flutter Entertainment, William Hill and 888 rose between 2.6% and 3.5%.
French wine and spirits producer Remy Cointreau slipped 0.2% as broker Kepler Cheuvreux downgraded the title to “hold” after a US decision last week to impose additional tariffs on French wines and cognac .
Reporting by Amal S and Sruthi Shankar in Bengaluru; Editing by Shailesh Kuber and Lisa Shumaker
