By Sruthi Shankar.
(Reuters) – European stocks rebounded from two-week lows on Monday as signs of progress in developing a COVID-19 treatment offset fears of a resurgence of virus cases across the continent that could risk stifling the economic recovery.
The pan-European STOXX 600 Index () rose 1.3%, reflecting gains in Asian markets, after U.S. health regulators said Sunday that they authorized the use of plasma from patients recovering from COVID-19 as a treatment.
Spain’s Grifols (MC:), one of the world’s top producers of human plasma-based therapies, rose 3%.
AstraZeneca (L:) surged 2.5% after the Financial Times reported that the Trump administration is considering fast-tracking an experimental COVID-19 vaccine the company is developing.
“Vaccine news over the weekend is paramount,” says Keith Temperton, an analyst at Lombard Forte.” But we’re in a volume vacuum in the middle of this summer, and the path of least resistance is higher.”
Oil and gas companies () led Europe’s gains, benefiting from higher crude prices as the storm approached the Gulf of Mexico and shut down more than half of oil production. [O/R]
Technology (), mining () and chemicals () companies also rose nearly 2 percent.
British telecoms company BT Group (L:) surged 4.3 percent after media reports said its board was preparing to defend it against rivals and takeovers of the company.
The rise in European stocks comes after a lackluster week that saw the eurozone’s business recovery stall amid a spike in coronavirus cases.
The number of COVID-19 infected people has risen and may now be more than one person, according to a UK government data released last Friday, indicating a risk of growth in the overall outbreak.
Similarly, Germany, France and Spain have seen a spike in virus cases and their leaders are looking at tightening travel restrictions.
“The way we look at the COVID narrative seems to be changing. The market is looking at a better picture in terms of hospitalization rates and mortality,” Temperton said.
Shares in British Airways owner IAG (L:) fell 0.5% and Air France (PA:) fell 0.4% after the British government said travellers to France need to self-certify they have no coronavirus symptoms or have been exposed to a confirmed case in the 14 days prior to travel.
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