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26 May 2020 | 11:26

Europe open: Travel stocks jump as restrictions on sector ease

(Sharecast News) - Stocks in Europe are extending gains from the previous session as travel stocks rally amid news of easing travel restrictions across the Continent. Investors were also taking a glass 'half full' approach to the latest news around efforts to develop a vaccine for the novel coronavirus.

Shares of Novavax were bounding ahead by 20%, having already multiplied their value nearly tenfold year-to-date, after the US biotechnology outfit said it had begun human trials of its vaccine candidate with a first reading possible in July.

"The vaccine news has been the spark that was needed to push stock markets above and beyond month-long sideways ranges. Another new vaccine in development offers another path towards the coronavirus endgame," said Jasper Lawler, director of research at LCG.

As of 1030 GMT, Europe's main indices were pushing towards 11-week highs, with the benchmark Stoxx 600 up by 1.0% to 348.64 alongside a 0.67% advance for the German Dax to 11,469.50, while the FTSE Mibtel was ahead by 1.39% to 17,839.71.

Travel& Leisure issues were easily the best performing group on the pan-European Stoxx 600, jumping 6.67%, followed by a 3.31% gain for lenders' shares.

Over the weekend, the Spanish government announced that 14-day quarantines for visitors to the country would cease at the start of July, boosting shares in the likes of IAG and Easyjet.

TUI AG was another top gainer following reports that Berlin was set to cancel travel warnings.

In the background, S&P 500 futures were pointing to a move past the 3,000 point mark for that index at the start of trading.

The latest batch of economic data was positive on the whole.

Consultancy GfK's consumer confidence index for Germany improved marginally from a reading of -23.1 for May to -18.9 in June (consensus: -18.0).

Nevertheless, some economists said the details were stronger, pointing to a solid foundation for consumption to bounce back during the third quarter, despite workers' caution in the wake of reduced working hours.

The day before, the closely-followed IFO institute's German business confidence index rose from April's level of 74.2 points to 79.5 in May (consensus: 78.3).

On the coronavirus front, on Sunday the number of new Covid-19 cases in Spain fell to 130.
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