(Reuters) - European shares jumped to an eight-month high on Monday after drugmakers Pfizer and BioNTech flagged strong progress in their COVID-19 vaccine, while Joe Biden’s election victory raised hopes of a more stable U.S. trade policy.
The pan-European STOXX 600 .STOXX jumped nearly 4% and clocked its best day since late March. Travel and leisure stocks .SXTP, which have been the hardest hit by the pandemic, were among the best performing sectors, adding 7% to hit an eight-month high.
BioNTech's shares jumped more than 15%, while Germany's main stock index .GDAXI added 5%. The index was also boosted by positive trade data for September.
“News on the efficacy of a vaccine is an important piece of the puzzle needed for the global economy and markets to put the COVID-19 recession behind it,” said Karen Ward, chief market strategist EMEA at J.P. Morgan Asset Management.
“Coupled with Biden’s win, and a more predictable multilateral approach to issues such as trade and climate change, the stage is set for a more balanced return trajectory.”
Optimism over a win on Saturday by Democratic candidate Joe Biden in the U.S. election saw European stocks swiftly bouncing back, with the STOXX 600 trading about 11% higher in November so far.
But a resurgence in virus cases had hit markets hard last month, with the STOXX 600 losing more than 5% after the UK, Ireland and France all announced new nation-wide lockdowns.
Investor attention has also been on Brexit trade talks, with Britain saying it was open to a “sensible” compromise on fishing and that there was goodwill on both sides to progress towards a trade deal.
In company news, German chipmaker Infineon IFXGn.DE gained 3.5% as it forecast a nearly 23% jump in revenue in the year ahead.
British homebuilder Taylor Wimpey TW.L surged 18.6% after saying it was set to deliver annual results towards the upper end of expectations as the housing market recovered quicker than expected from a coronavirus-led slump.
Volumes for STOXX 600 were 2.8 times their 90-day daily average by 1706 GMT as investors stormed to equity markets to play the Biden win trade and a positive COVID-19 vaccine update from Pfizer.
Reporting by Sagarika Jaisinghani, Shreyashi Sanyal and Shashank Nayar in Bengaluru; Editing by Chizu Nomiyama and Shailesh Kuber
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