Europe open: Vaccine optimism gives shares a bright start

European shares started brightly on Wednesday as US regulators reported they had no issues with the Pfizer/BioNTech Covid-19 vaccine while Johnson & Johnson said it could produce late-stage trial results next month.

The optimism fuelled optimism on Wall Street overnight and also helped the pan-European Stoxx 600 index rise 0.48% with all major bourses higher.

Richard Hunter, head of markets at interactive investor, said the US vaccine news, along with the UK starting its roll out meant “expectations are increasing for a relatively early solution to the human and economic problems which the pandemic has caused”.

“Meanwhile, there are also signs of some progress in exiting a political stalemate which has thus far prevented any further fiscal stimulus. With US economic data remaining patchy, the need for a boost to Main Street is becoming increasingly evident and investors are pinning hopes on some sort of package before the end of the month.”

However, the optimism was tempered as investors eyed last-ditch talks to break the Brexit trade deal impasse. UK Prime Minister Boris Johnson is flying to Brussels today for talks with European Commission President Ursula von der Leyen.

In equity news, shares in German chemicals group Covestro soared in early trade before paring back gains as the company on Tuesday raised its 2020 earnings forecast as activities in the fourth quarter of the current year are stronger than previously expected.

The company said it now expected core earnings to be between €1.44bn - €1.5bn, compared with previous guidance of roughly €1.2bn due to better margin development in its polyurethanes and polycarbonate units.

Howden Joinery shares were up 8% as the company upgraded its full-year profit expectations.

The trade supplier of kitchens and joinery products said it expected full-year pre-tax profit to be around 10% above the top end of current analyst forecasts of £123m - £152m.

Shares in UK house builder Vistry rose on news it would consider reinstating a “modest” final dividend, citing strong cash performance.