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Europe: Vaccine hopes, upbeat earnings power shares

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European shares bounced on Friday on hopes that a vaccine for the novel coronavirus could be available in the United States before the end of the year, with a clutch of upbeat quarterly earnings also lifting sentiment after a torrid week.

[BENGALURU] European shares bounced on Friday on hopes that a vaccine for the novel coronavirus could be available in the United States before the end of the year, with a clutch of upbeat quarterly earnings also lifting sentiment after a torrid week.

Pfizer Inc said it could file for US authorisation of the Covid-19 vaccine it is developing with German partner BioNTech as early as November.

The news powered global stock markets and helped lift the pan-European Stoxx 600 by 1.3 per cent in its best session in nearly three weeks.

The benchmark stock index nevertheless ended Friday with its first weekly decline in three as a resurgence in coronavirus cases across Europe stoked fears about more sweeping lockdowns.

London and Paris, Europe's two richest cities, are again living under the shadow of state-imposed restrictions.

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"This raises the very real fear that what is a stop-gap measure actually turns out to be something slightly longer term, which could see the collapse of hundreds of businesses," said Michael Hewson, market analyst at CMC Markets UK.

The new restrictions could also stifle business activity, derail a nascent economic rebound and further pressure European stock markets, which have lagged a recovery in their US peers.

While the S&P 500 has gained about 8 per cent this year, the European Stoxx 600 is still down nearly 12 per cent.

Adding to investor uncertainty, British Prime Minister Boris Johnson said on Friday it was time to prepare for a no-trade deal Brexit unless the European Union fundamentally changed course in trade talks.

London's FTSE 100 still rose 1.5 per cent as analysts said the majority of market participants expected a deal to be reached.

In company news, Thyssenkrupp surged 10.8 per cent as Liberty Steel, founded by commodities tycoon Sanjeev Gupta, said it had made a non-binding offer for the company's steel unit.

LVMH jumped 7.3 per cent as recovering sales of Louis Vuitton handbags helped it contain the fallout from the coronavirus crisis in the third quarter.

Shares of other luxury goods makers including Moncler and Burberry rose more than 3 per cent.

Telecoms and real estate were the only two European sectors to end lower on the day.

German shares rose 1.6 per cent, clawing back more than half their losses from the previous session, with Daimler surging 5.5 per cent after the luxury carmaker posted forecast-beating third-quarter results.

A 3.3 per cent rise for Volvo after stronger-than-expected results also helped power the European autos index to its best session since Sept 28.

REUTERS

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