Oil Jumps With Vaccine News Igniting Hopes of Improved Demand

12:07 10 November in Latest News

© Reuters.

-European stock markets largely edged higher Tuesday, continuing Monday’s coronavirus vaccine-inspired optimism, helped by some positive corporate news.

At 3:50 AM ET (0750 GMT), the DAX in Germany traded 0.4% lower, the CAC 40 in France rose 0.7%, while the U.K.’s FTSE 100 index climbed 0.4%.

On Monday, the DAX rose nearly 5%, the CAC 40 jumped 7.6% and the FTSE 100 climbed 4.7% after U.S. drugmaker Pfizer (NYSE:PFE) said its Covid-19 vaccine, developed with German partner BioNTech, was more than 90% effective in preventing the infection.

Banking, travel and leisure and energy stocks continued to post gains Tuesday, after strongly outperforming on Monday.

Specifically, aero engine maker Rolls Royce (LON:RR) leaped another 20% to a five-month high, on expectations of a faster pick-up in air travel. Lufthansa (DE:LHAG) stock climbed 2.2% after the troubled airline launched an offering for around 525 million euros ($620.97 million) of senior unsecured convertible bonds due in 2025.

Thyssenkrupp (DE:TKAG) stock rose 1.2% after the company announced it was in talks with the German government over an aid package for its struggling steel unit worth at least 5 billion euros ($5.9 billion).

But, sportswear firm Adidas (OTC:ADDYY) stock fell 3.6% even as it said it expects sales to return to growth in China in the fourth quarter.

As welcome as the news of the vaccine is, it doesn’t change “the near-term fact that the global economy faces a challenging winter,” said ING analysts, in a research note.

“Renewed lockdowns across the eurozone are likely to shave roughly 2% off GDP in the fourth quarter, according to our latest forecasts, while the risk of further restrictions in the U.S. will put a considerable brake on activity.”

The economic news remains challenging. British employers made a record number of staff redundant in the third quarter while France’s unemployment rate rose to its highest level in two years. Eyes will next focus on the important German ZEW economic sentiment index later in the session, and it’s expected to show a sharp decline in November.

Oil prices steadied Tuesday, after Monday’s sharp gains on the back of the vaccine news. With the number of coronavirus cases continuing to rise in Europe and parts of the U.S., and some lockdown measures in place, the short term picture for crude demand remains challenging.

U.S. crude futures traded 0.9% higher at $40.64 a barrel, after jumping 8.5% the previous session, while the international benchmark Brent contract was 1% higher at $42.84, after climbing 7.5% higher.

Elsewhere, gold futures rose 1.7% to $1,885.90/oz, after falling more than 5% Monday as investors rushed into riskier instruments, like stocks, while EUR/USD traded 0.2% higher at 1.1835.


( – Stock Market Quotes & Financial News)