Vaccine hopes, dealmaking stoke Wall Street optimism

European stock markets were close to flat Monday but Wall Street enjoyed solid gains, buoyed by coronavirus vaccine hopes and big-ticket deals.

Trials on one of the most advanced vaccines resumed at the weekend after pausing when a volunteer fell ill.

British regulators gave AstraZeneca and the University of Oxford the go-ahead to push on following an investigation, while the drug group said it remained hopeful the vaccine would still be available “by the end of this year, early next year”.

Meanwhile pharma giant Gilead said it would buy breast cancer drug maker Immunomedics for $21 billion.

And in tech, Japan’s SoftBank group announced the sale of British chip designer Arm to US-based NVIDIA for $40 billion, while the US Treasury said it had received a bid involving Oracle for video-sharing app TikTok’s US operations.

“US stocks are rebounding noticeably from a two-week pullback from record high territory, with a flood of M&A activity and a host of news on the Covid-19 vaccine/treatment front fostering the recovery,” Charles Schwab analysts wrote.

Europe was weighed down as countries reported rising coronavirus infections and some issued new measures to control the spread of Covid-19.

The World Health Organization’s European chief Hans Kluge told AFP Monday that the autumn will be “tougher” with “more mortality” from Covid-19.

And Britain’s parliament found itself arguing about Brexit again, with threats of rebellion and resignations over Prime Minister Boris Johnson’s plan for a new law that would break his EU divorce treaty.

The contentious legislation, unveiled last week, would override the divorce deal the UK struck with the EU last year in several key areas related to Northern Ireland.

“The Brexit vote should ensure volatility for the pound and FTSE,” noted Joshua Mahony, senior market analyst at IG trading group.

Sterling was up slightly against both the dollar and the euro, although it was far from making up the 3.6 percent it shed last week on Brexit concerns. (AFP)

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