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European shares were on track to post their biggest gain for the month of August since the financial crisis in 2009, helped by positive news on the vaccine front and as governments in the region ruled out new lockdowns.
The Stoxx Europe 600 Index was little changed at 2:23 p.m. CET, after rising as much as 0.7% earlier in the session. While the index is up 3.5% on the month, it’s still stuck in its summer trading range, falling behind a sharp rally on Wall Street where a number of stock benchmarks have hit record highs. Volumes were thin on Monday in Europe, as the U.K. market was closed for a public holiday.
Sentiment was boosted on Monday by data showing Chinese economic activity rebounding further this month, with a gauge of the services industry at the strongest level since early 2018. The week is set to offer clues about Europe’s economic recovery also, with final euro-area PMI numbers and Italy’s GDP for the second quarter due. Europe’s utility sector featured among the top gainers on Monday, with shares in French water management company Suez SA (OTC:SZSAY) jumping 19% after Veolia Environnement (OTC:VEOEY) SA offered 2.9 billion euros ($3.5 billion) for a 29.9% stake in the company.
“Market participants are currently torn between light and shadow,” said Comdirect Bank strategist Andreas Lipkow. “On the one hand, an economic recovery is foreseeable and therefore cyclical industries in particular are of interest and, on the other hand, there are still many show-stopper issues, such as the trade conflict between the U.S. and China or Brexit.”
©2020 Bloomberg L.P.
