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22 Mar 2021 | 12:05

Europe midday: Stocks rally on AstraZeneca US trial results

(Sharecast News) - European shares turned positive by midday as positive results from AstraZeneca's Covid vaccine trials in the US produced positive results, offsetting worries about the plunging Turkish lira and extended European lockdowns. The pan-European STOXX 600 was flat, having been 0.5% lower at the opening. A final-stage US trial of AstraZeneca's Covid-19 vaccine has found it to be 100% effective at keeping patients out of hospital.

Results of the US phase III trial of AZD1222, developed with Oxford University, showed 79% vaccine efficiency in preventing Covid-19 and 100% efficacy at preventing severe disease and hospitalisation, the company said.

Britain's FTSE 100, was up 0.09%, shrugging off worries about supply problems with the AstraZeneca vaccine and the threat of an EU block on exports of the drug amid an ongoing row over contracts with the Anglo-Swedish firm.

Germany's DAX was driven higher by the auto sector with BMW, Porsche and Volkswagen all higher.

Sentiment was battered early as the Turkish lira fell to a record low after President Tayyip Erdogan replaced a hawkish central bank governor with a critic of high interest rates over the weekend.

Euro zone banks exposed to Turkey, such as Spain's BBVA, Italy's UniCredit, France's BNP Paribas, and Dutch bank ING all suffered share price falls.

Travel stocks also dropped fell on reports of extended lockdowns in Italy, Germany and France in an effort to stymie the Covid-19 pandemic and UK officials warned against summer holidays in an effort to consolidate the interim success of Britain's vaccination rollout.

"While the prospect of a big European restart on the summer holidays front was always a long shot, events over the weekend have made the prospect even more remote, as the prospect of a third wave across Europe pushes the prospect of any sort of economic restart into the back end of Q2," said CMC Markets analyst Michael Hewson.

"Meanwhile, as European share trading gets set for a new week, the various missteps in the EU's response to its vaccination program could well be compounded by reports that the bloc is considering various measures to shore up its supply chain, including the blocking of vaccine exports to the UK."

Shares in budget airline easyJet fell 5.5%, Ryanair followed suit, down 4.3%. Deutsche Lufthansa, TUI, Carnival and Aeroports de Paris were all in the red.

British retailer Kingfisher rose 3% after it reported a sharp rise in full-year profit, driven by the popularity of do-it-yourself projects.

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