Europe midday: Stocks up on France stimulus news, CDC vaccine plans

(Sharecast News) - Stocks are holding higher on the back of news of Paris and Berlin's fiscal stimulus plans and US health officials' announcement that states should be ready to distribute a Covid-19 vaccine from 1 November.
"News that France is throwing an additional €100 billion at its economy, and comments about the strength of the euro from ECB policymakers, have combined to provide fresh impetus to the rally in European stocks this morning," said IG's Chris Beauchamp.

"Equities continue to exhibit notable strength as they rise heedless of the ongoing tick higher in virus cases and signs that the economic rebound is slowing."

But for David Madden at CMC Markets UK, the main driver behind the gains was the announcement overnight from the US Centers for Disease Control that health officials should make preparations to begin distributing a Covid-19 vaccine from the start of November.

As of 1215 BST, the benchmark Stoxx 600 was up 0.97% at 374.89, alongside an advance of 1.24% for the German Dax to 13,408.06 while the FTSE Mibtel was adding 0.92% to 20,041.60.

At the pan-European level, Travel&Leisure names were putting in the biggest gain, rising by 3.23%, followed by advances for Autos&Parts (2.65%), Industrials (1.79%) and Banks (1.59%).

Euro/dollar was dipping alongside, by 0.32% to 1.1812, after the Financial Times reported that European Central Bank officials were concerned that euro strength would weigh on Eurozone exports and prices.

Meanwhile, French authorities laid out plans for a €100bn stimulus programme for the euro area's second-largest economy.

And to the East, German finance minister, Olaf Scholz, again made the case for fiscal stimulus in 2021, albeit adding that the country's finances should return to normal in 2022.

In remarks to ARD television, the head of Germany's CDU/CSU, Ralph Brinkhaus, appeared to endorse those plans.

The news on the fiscal front came as Eurostat reported a slowdown in euro area retail sales in July to a year-on-year pace of 0.4%, down from 1.2% in the month before (consensus: 3.7%).

IHS Markit's euro area services sector Purchasing Managers' Index for August was revised up from a preliminary reading of 50.1 to 50.5, although even that remained far beneath July's reading of 54.7.