Europe Markets

European markets close slightly higher after positive coronavirus vaccine news

Key Points
  • The pan-European Stoxx 600 closed up by about 0.2%.
  • German stocks were affected earlier in the day by technical issues.
  • Pfizer released positive results from a human trial of a coronavirus vaccine.

European stocks eked out minor gains on Wednesday, following positive news about a U.S. coronavirus vaccine trial.

The pan-European Stoxx 600 closed up by about 0.2%, however gains in the broader market were capped with the German blue-chip DAX index slipping 0.5%.

German stocks were affected earlier in the day by technical issues on the Xetra trading platform, which operates the DAX index, causing volumes to lag the rest of the continent at the start of the session. Trading resumed at around 11:30 a.m. London time.

Market participants in Europe digested the latest indication of an economic recovery in China Wednesday after a private survey showed Chinese manufacturing activity in June growing more than expected. 

The Caixin/Markit manufacturing Purchasing Manager's Index (PMI) came in at 51.2 in June, above expectations of a reading of 50.5 by analysts in a Reuters poll. Stocks in Asia Pacific mostly edged higher in Wednesday afternoon trade. 

PMI readings above the 50-level signify expansion on a monthly basis, while those below that figure represent contraction. The official manufacturing PMI released Tuesday also showed factory activity in China expanding in June.

On Wall Street, shares kicked off the second half of 2020 on an optimistic note following positive vaccine news and strong U.S. economic data.

Pfizer released positive results from its closely-watched human trial of a Covid-19 vaccine on Wednesday. The firm is working with Germany's BioNTech on the vaccine.

Meanwhile, ADP and Moody's Analytics said private payrolls jumped by 2.37 million in June. Payrolls for May were also revised to a gain of more than 3 million from a loss of 2.76 million. 

Back in Europe, Germany's manufacturing contraction eased in June, with the final IHS Markit PMI on Wednesday coming in at 45.2, exceeding a flash estimate of 44.6 and up from 36.6 in May. Any reading below 50 signals a contraction. Manufacturing comprises around one-fifth of Europe's largest economy. 

Figures from Germany's Federal Labour Office showed the country's jobless total rising by 69,000 in June, slowing from the 237,000 recorded in May.

In terms of individual share price action in Europe, Swiss chemicals company Clariant climbed over 7% after announcing the sale of its Masterbatches business. At the other end of the Stoxx 600, British brokerage Hargreaves Landsown fell by more than 5%.