European stocks closed higher on Wednesday following a choppy start to trading, as investors continued to bet on an impending economic recovery from the coronavirus crisis.
The pan-European Stoxx 600 closed up by over 1.1%, with most sectors and major bourses in positive territory. Telecoms shares added 1.7% to lead gains while the travel and leisure sector bucked the positive trend with a 1% decline.
Figures published Wednesday revealed that the U.K. had officially entered a recession after gross domestic product contracted by a record of 20.4% in the second quarter of 2020, compared to the previous three months. However, an 8.7% rebound in June offered some cause for optimism.
Global markets are watching developments in the coronavirus outbreak carefully after global cases of the virus have now topped 20 million, with many regions struggling to ramp up testing to capture the true scale of the global outbreak.
New Zealand’s Prime Minister Jacinda Ardern said that she would delay the general election process after the country reported its first cases on Tuesday, after 102 days without any local transmissions. A sharp rise in daily cases in France also prompted Prime Minister Jean Castex to reportedly warn the country that it has been going “the wrong way” for the past two weeks.
On Wall Street, stocks rose as shares of major tech companies recovered some of their steep losses from the previous session. Sentiment was also lifted after President Donald Trump said late Tuesday that the U.S. government will purchase 100 million doses of Moderna’s experimental coronavirus vaccine, which is currently in late-stage human trials.
In the U.S., daily new cases appear to be decreasing, though testing in several large states, including Texas, has also fallen, which could complicate the data. In other news, Russian President Vladimir Putin said Tuesday the country has approved the world’s first vaccine, though researchers have not released any safety and efficacy data on the drug.
Earnings remain on investors’ radar. Dutch bank ABN Amro jumped 8% after beating second-quarter profit expectations, while also announcing that it would quit its trade and commodity financing operations in a massive corporate bank overhaul.
In terms of individual share price action, Swiss telecoms company Sunrise Communications surged almost 27% after Liberty Global launched a full takeover bid. The bid also sent Freenet shares nearly 17% higher.