Europe open: Shares higher on extension in Brexit talks
European shares opened higher on Monday as investors were cheered by an extension in the long-running Brexit trade talks.
The STOXX 600 index rose 0.81% closing 1% lower last week on the back of five weeks of gains. The UK FTSE 100 index was up slightly as the pound strengthened against the dollar and euro, hitting the export-heavy index.
It was also held back on a slide in AstraZeneca shares after the pharma giant said it was buying US drugmaker Alexion Pharmaceuticals for $39bn.
“In the meantime, the index could come under some shorter term pressure as the news that Brexit negotiations are being extended gives a minor boost to sterling, which in turn has an inverse effect on the performance of a basket of stocks largely exposed to overseas earnings,” said Interactive Investors analyst Richard Hunter.
“While it remains too early to predict that the Brexit clouds are clearing, it nonetheless keeps the hopes of the optimists alive that a potentially chaotic no-deal outcome may yet be avoided.”
Leaders from both sides decided to extend talks beyond a Sunday deadline in an attempt to secure a deal.
US futures were higher as the first Covid-19 vaccines started to roll out of storage in what will be America's largest ever immunisation programme.
In equity news, shares in Polish video game publisher CD Projekt slumped 16% after its highly-anticipated title Cyberpunk 2077 was criticised for glitches and bugs in performance. The sci-fi role-playing game sold more than 8 m copies in pre-orders before launch.
On the upside housebuilders and banks all gained on the Brexit news with Taylor Wimpey, Vistry, Persimmon, Barratt, Redrow, Lloyds, NatWest and Barclays all higher.
"British banks with high exposure to the UK economy and property market remain high beta Brexit stocks. Likewise, housebuilders popped 5% higher on Brexit deal hopes. These stocks are a leveraged bet on the UK economy, which in the near-term at least is going to be at the mercy of a Brexit trade deal and the vaccination programme," said Markets.com analyst Neil Wilson.