Europe Markets

European markets close higher after unveiling of EU's recovery plan; Renault shares rise 17%

Key Points
  • Investors digested the European Commission's plan for a 750 billion euro ($826.5 billion) recovery fund, as the region faces its worst economic crisis since the 1930s.
  • It came after Germany and France proposed last week to raise common European debt in an effort to support the region's economic recovery from the coronavirus crisis. 

European stocks closed higher Wednesday, following the unveiling of a huge coronavirus recovery package from the EU.

The pan-European Stoxx 600 index finished 0.2% higher with strong gains for the major bourses in Germany, France and the U.K. Bank stocks rising almost 4% to lead gains while health shares declined 2.5% to lead the losses.

Investors digested the European Commission's plan for a 750 billion euro ($826.5 billion) recovery fund, as the region faces its worst economic crisis since the 1930s.

It came after Germany and France proposed last week to raise common European debt in an effort to support the region's economic recovery from the coronavirus crisis. 

Markets are weighing the potential impact of rising tensions between Washington and Beijing, against economies reopening following coronavirus lockdowns. A Bloomberg News report said the U.S. was considering sanctions on Chinese firms and officials over the situation in Hong Kong. U.S. President Donald Trump said Tuesday afternoon he would make an announcement about the administration's response to China's actions by the end of this week.

On Wall Street, stocks gave back a big chunk of their earlier gains as a drop in tech shares offset optimism about the reopening of the economy.

Back in Europe, pressure is mounting on U.K. Prime Minister Boris Johnson as a political battle over the position of his top aide Dominic Cummings, who is accused of breaking U.K. lockdown rules, intensifies. Cummings has refused to apologize and Boris Johnson has backed his advisor, despite widespread calls for Cummings to resign.

In corporate news, Renault and Nissan on Wednesday announced plans to revamp their fragile alliance in order to slash costs and survive. The announcement drove Renault shares over 17% higher.

Biggest movers

Shares of Anglo-German travel operator Tui added to Tuesday's remarkable 52% surge to rally another 15%, buoyed by the prospect of travel restrictions being lifted in Europe. Cinema chain Cineworld climbed a further 11%, also continuing significant gains seen on Tuesday.

At the bottom of the European benchmark, Italian biotech firm DiaSorin tumbled 12%.