December 1, 2020
By Susan Mathew
(Reuters) – European shares on Tuesday made a positive start to the month following record-breaking gains in November, with optimism around a coronavirus vaccine strengthening the case for an economic recovery.
After a day’s dip, when investors took some profits, the pan-European STOXX 600 index was back in the black, up 0.8%. The index ended November with gains of nearly 14%.
However, Stanhope Capital’s Chief Investment Officer Jonathan Bell warned it may be difficult to keep up November’s rally, given how high valuations are.
“Going to December there’ll be little bit of a pause despite all the good news surrounding vaccines,” Bell said, also highlighting the pressure on GDP from coronavirus-induced lockdowns put in place last month.
Data on Tuesday showed lockdowns in France and Italy slowed manufacturing activity in November.
But keeping hopes of economic recovery alive, a business survey echoed official numbers from a day earlier which showed robust growth in China’s factory activity.
Investors, however, may have already started to price in consistently good data from China, Bell said.
On the Brexit front, the European Union will launch contingency measures on Wednesday or Thursday, if it is unable to reach an agreement by then with Britain, a senior EU diplomat said. UK’s Brexit supremo, Michael Gove said on Tuesday talks are still stuck on fishing, governance rules and dispute resolution.
After marking its best month in over three decades, London’s blue-chip index rallied 1.5% to lead gains among regional peers, attempting to make up last session’s losses.
Among other events this month, some European nations are set to lift curbs put in place to control the spread of the novel coronavirus, Britain is due to return to a regional approach to restrictions from Dec. 2, while the European Central Bank’s meeting will be eyed for policy easing.
Ipsen SA jumped 2% after the French healthcare company said it expected to generate some cumulative 3 billion euros ($3.59 billion) to power its pipeline expansion by 2024, excluding asset sales.
Italian lender Unicredit SpA fell 5.7% after it said Chief Executive Officer Jean Pierre Mustier will step down in April next year over disagreements with the board.
(Reporting by Susan Mathew in Bengaluru; Editing by Shounak Dasgupta)
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