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15 Feb 2021 | 18:33

Europe close: Stimulus and vaccine hopes boost shares

(Sharecast News) - European shares extended gains pushed ahead in a big way at the start of the week, fuelled by the prospect of further fiscal stimulus in the States and for the rollout of vaccines. The pan-European Stoxx 600 rose 1.32% to 419.47, alongside a 1.45% gain for the French Cac-40 to 5,786.25 while Spain's Ibex 35 was ahead 1.84% at 8,203.5.

Germany's Dax on the other hand was up by a tamer 0.42% to 14,109.48.

At the sector level on the Stoxx 600, Basic Resources (4.0%), Oil&Gas (3.99%) and Banks (3.1%) clocked in with the biggest gains.

Higher oil and copper prices were also a key driver, although trading volumes were thin with markets in China, Hong Kong and the US all shut for local holidays.

Copper was atop a nearly eight-year high on hopes for US infrastructure spending while front dated Brent crude oil advanced 1.22% to $63.19 a barrel on the ICE.

Government bond yields were also up, with those on Bunds four basis points higher to -0.38%.

Investors brushed aside data showing Eurozone industrial output falling more than expected in December as manufacturing of capital goods dropped.

Industrial production dropped 1.6% from the month before, European Union statistical agency Eurostat said. The reading was worse than analysts' average forecast for a 0.6% drop and marked a downturn after 2.6% growth in November.

Overnight, Japanese shares shone, with the benchmark Nikkei index breaching 30,000 for the first time in three decades as some analysts lay out their hopes for a synchronised upturn in the global economy in the second quarter.

Airline and travel stocks benefitted as the UK government said it had met its target to offer a Covid vaccine jab to all people aged 70 and above and had now targeted the 65-69 aged group. This boosted hopes of an easing of curbs sooner rather than later.

Shares in British Airways owner IAG, budget carrier easyJet and travel operator TUI all snapped higher on expectations of some foreign travel this summer.

Elsewhere, Bollore surged 15% as French media giant Vivendi said it planned to distribute 60% of Universal Music's capital to investors and aimed to list its most-prized asset by the end of the year. Vivendi stock soared by 20%, hitting a fresh record high in the process.
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