LONDON – European equities rose sharply on Monday, with global markets rebounding as US Treasury yields declined and driven by positive news ahead of the coronavirus vaccine.
The pan-European Stoxx 600 jumped 1.7% at the start of the trade, with basic resources adding 2.7% for leadership gains, as all sectors and major exchanges entered positive territory.
The sharp rise for European markets comes after U.S. stock futures soared sharply in overnight trading, with Treasury yields continuing to decline from last week’s highs. The stock has been under pressure in recent weeks, as rising yields have made the stock look less attractive to investors.
The main averages increased in February, driven by a strong profit season, positive news about the vaccine launch and hopes for another stimulus package. The House passed a $ 1.9 trillion Covid relief bill, the 2021 American Rescue Plan Act, early Saturday. The Senate will now consider the legislation.
More positive news about the Covid-19 vaccine front also surfaced this weekend, with the advisory panel of the US Center for Disease Control and Prevention voting unanimously on Sunday to recommend the use of Johnson & Johnson’s unique Covid-19 vaccine for people 18 years of age and older. The company expects to ship 4 million doses initially.
Meanwhile, in Asia-Pacific, the shares traded higher on Monday, despite the release of data showing that growth in China’s manufacturing activity slowed in February.
China’s official manufacturing purchasing managers’ index (PMI) for February stood at 50.6 over the weekend, data from the country’s National Bureau of Statistics showed. This was lower than the January reading of 51.3, but still above the 50 level that separates expansion from contraction.
A private survey released on Monday also showed that China’s manufacturing activity in February grew at a slower pace.
In Europe on Monday, the gains came from Bunzl and the Bank of Ireland, and a series of data publications include manufacturing PMI data, UK mortgage approval data and inflation figures from Italy and Germany.
In terms of individual stock price movement, British construction company Persimmon and British Airways’ parent company, IAG, rose more than 5% in the first trades to lead the European blue chip index.
– Maggie Fitzgerald and Eustance Huang from CNBC contributed to this market report.
Subscribe to CNBC PRO for exclusive insights and analysis and live weekday programming from around the world.