Europe open: Shares continue rise on Covid vaccine optimism

European shares continued to make gains on Wednesday as investors remained optimistic about a potential Covid-19 vaccine from Pfizer, despite the rising number of cases across the Continent.

The pan-European Stoxx 600 index was up 0.51%, with all bourses up, apart from Spain’s Ibex. The UK FTSE 100 hit its highest level since June, while US futures also spurred sentiment as the Dow indicated a 157 point rise.

“What could be a game changer for Europe, however, is that the Dow Jones is currently heading for a 100 point increase when trading starts stateside, lifting it to 29,540 as it continues to make eyes at its all-time highs,” said Spreadex analyst Connor Campbell.

“And with little else to go off – the markets seem to be in a post-election, post-vaccine news lull – that could be enough to generate some positive action this afternoon.”

“The Dow’s prospective gains also continue to suggest that investors aren’t panicking about Trump’s various legal challenges to the election result, despite Secretary of State Mike Pompeo’s ‘joke’ that there will be a ‘smooth transition to a second Trump administration’.”

Neil Wilson at Markets.com said that after Monday’s surge on the news of a potential vaccine “investors will need to work out now which ‘value’ stocks remain value traps and which have some growth in them”.

“Expect pullbacks along the way but the overall landscape remains much more positive than it was a week ago for these sectors worst affected by the pandemic.”

“However it’s a bit more complex today than being all about the reopening trade – this week’s big gainers like Rolls-Royce and Compass Group are down, whilst Ocado, Kingfisher and Just Eat have risen. “

In corporate news, German IT group Bechtle was up almost 12% after third quarter earnings beat expectations. The company said earnings grew 26.2% €50.76m.

Defence aerospace group BAE Systems rallied after it said underlying earnings would be slightly higher than forecast as order intake levels moved ahead of original pre-Covid planning.

Flutter Entertainment gained as it upgraded its earnings forecast for business outside the US but said the loss at its American gambling operation would be bigger than expected after it spent to acquire customers.

On the downside, Workspace fell after saying it swung to a loss in the first half, with income hit as customers vacated or downsized due to the Covid-19 pandemic. It also deferred a decision on dividend payments.

French shopping mall owner Klepierre was down after strong gains over the last two days. Travel food operator SSP was also down along with Frankfurt airport operator Fraport.