Europe close: Stocks extend rally from Covid-19 lows

Stocks across the Continent extended their recent rally from their Covid-19 pandemic lows thanks to "positive" news Stateside on a potentially key treatment for the virus.

Shortly after noon, US biotechnology giant Gilead Sciences said it was aware of positive data out of a clinical trial being conducted by the National Institute of Allergy and Infectious Diseases’ into its Remdesivir antiviral for use against the virus.

That was on top of other positive news the day before relating to another clinical study being conducted by Oxford University's Jenner Institute.

"Traders are also bullish on stocks due to a report that showed some progress had been made in relation to a possible treatment for Covid-19," said David Madden at CMC Markets UK.

"It is understood that Gilead Science’s antiviral drug, Remdesivir, showed 'positive data' in a trail. There has been some back and forth in relation to the drug in question, but for now the sentiment seems to be positive."

Against that backdrop, by the end of the trading day, the benchmark Stoxx 600 had gained 1.75% to trade at 347.06, alongside a 2.89% rise for the German Dax to 11,107.74, which had now recouped roughly half of its drop since the start of the Covid-19 outbreak, while Milan's FTSE Mibtel was adding 2.21% to 18,067.29.

Further boosting sentiment was news that Chinese authorities were reportedly preparing a $565bn infrastructure investment package, while overnight US tech giant Google posted better-than-expected quarterly numbers.

crude oil futures were also percebtibly higher along shares, with June Brent higher by approximately 11% at $22.69 a barrel on the ICE.

On the economic side of things, M3 money supply data for March revealed an unexpected surge in growth to 7.5% year-on-year (consensus: 5.5%), in comparison to the prior month level of 5.5%.

According to Claus Vistesen at Pantheon Macroeconomics, depending on how "concentrated it was", the growth in money supply decreased the risk of a wave of corporate bankruptcies.

"Secondly, the stronger the liquidity flow is, even as economic activity remains halted, the stronger the pent-up demand will be in H2, holding all other things equal."

In his own words, it also showed that the euro area had averted a 'cash crunch'.

But there was also a fair bit of negative news out and about.

In an unscheduled decision, ratings agency Fitch cut its rating for long-term Italian government debt to BBB- leaving it just one notch above 'junk', albeit with a stable outlook.

Fitch analysts warned Italy's debt-to-GDP ratio was set to clamber to 156% in 2020, with some other analysts pointing to even worse in 2021.

Meanwhile, in Spain, the national statistics office, INE, reported a 14.1% year-on-year collapse in retail sales for March (consensus: -4.0%) after a 1.8% during the previous month.