European stock markets advance on hopes for virus treatment, EU deal
July 10 2020 09:05 PM
A man walks past the London Stock Exchange building. The FTSE 100 closed up 0.8% to 6,095.41 points
A man walks past the London Stock Exchange building. The FTSE 100 closed up 0.8% to 6,095.41 points yesterday.

AFP, Reuters London

European and US stocks advanced yesterday on optimism over the chances of an EU economic stimulus plan and fresh hopes for coronavirus treatments.
Traders nonetheless continued to track rising virus infection rates and braced for next week’s corporate earnings reports.
The London stock exchange was 0.8% higher at the close, while Frankfurt added 1.2% and Paris was up by 1.0%.
“European stocks climbed higher on improving production data, growing optimism EU leaders will reach an understanding next week on a 750 billion-euro economic response...and on positive news with Gilead’s coronavirus treatment and BioNTech’s Covid-19 vaccine,” OANDA analyst Edward Moya summed up. On the downside in Asia however, Hong Kong stocks sank 1.8% as a fresh outbreak in the city prompted authorities to reimpose measures including the closure of schools.
“It’s basically been a chop-fest this week,” noted analyst Neil Wilson.
Gold, after hitting a near nine-year high earlier this week, eased lower in late exchanges as markets advanced.
The markets have generally displayed a healthy resilience to the rapid spread of the disease around the world, with hopes for economic recovery, easing of lockdowns and government largesse providing crucial support.
“Covid-19 case numbers will need to be monitored but the market seems to have developed a degree of herd immunity to these, at least in terms of headline risk,” Wilson remarked.
The US had reported 65,551 new coronavirus cases, a record for a 24-hour period, with infectious diseases expert Anthony Fauci calling for a pause in states’ reopenings.
But Moya noted that analysis by US drugmaker Gilead of its leading anti-viral drug “indicated that remdesivir reduced mortality risk for Covid-19 patients by 62% compared to standard care.” 
In Brussels, EU Council president Charles Michel yesterday proposed setting up a 5bn ($5.7bn) reserve fund for unforeseen consequences of Brexit on bloc member states.
Analysts at the Dutch bank ING also noted that reticent EU members, not least the Netherlands, might “take steps towards a compromise on the EU recovery fund.”
Milan stocks were boosted by Italy reporting a rise in production of 42.1% in May from the month before, almost double of what economists were predicting, with the Economy minister forecasting further gains in June and July.
“The last batch of hard Data is somewhat comforting,” said Paolo Pizzoli, senior economist, EMU, Italy, Greece at ING.
“Both production and retail sales Data for May have shown that reopening after the strict lockdown was quick. This should, in principle, reduce the risk of an extreme GDP contraction in the second quarter.”
However, he warned that as most of the reopening in the manufacturing domain was completed in May, June Data will have limited room for a rise in production.
France’s CAC 40 rose for the first time in four sessions, as production at French factories, mines and water-treatment plants jumped an unprecedented 19.6% in May.
The STOXX 600 rose just 0.4% this week weighed by fears of more business shutdowns, particularly in the United States, as the country registered the largest single-day increase in new Covid-19 infections globally for the second day in a row on Thursday.
Investors are awaiting the second-quarter earnings season next week to gauge the economic damage wreaked by the crisis. Analysts are expecting a 53.9% fall in profit for STOXX 600-listed companies.
Focus is also on a European central bank meeting and a European Union summit next week, with hopes running high that a 750bn ($851.70bn) coronavirus recovery fund will be approved by the member states.
banks, auto stocks and food & beverage companies were among the biggest gainers on the day.
Danish brewer Carlsberg rose 6.4% after it said its expects a smaller-than-forecast drop in first-half Profit as its main China market had rebounded strongly during the second quarter.
In London, the FTSE 100 closed up 0.8% to 6,095.41 points; Frankfurt — DAX 30 ended up 1.2% to 12,633.71 points and Paris — CAC 40 closed up 1.0% to 4,970.48 points yesterday.

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