European stocks rose to their highest level in the current rebound, on optimism over economies reopening in some parts of the world and hopes for a vaccine to fight the coronavirus.
The Stoxx Europe 600 Index rose 1.1% to its highest close since early March. Travel and leisure shares rallied, led by a 52% surge in TUI AG, after a report that Germany plans to lift transport warnings, adding to optimism about tourism restarting in Europe. The FTSE 100 Index gained 1.2%, while the more domestic-focused FTSE 250 Index climbed 3.3% as the U.K. market reopened after a holiday yesterday.
Stocks are rising after Japan ended its state of emergency everywhere in the country, while Britain’s government outlined plans to reopen outdoor markets and car showrooms starting June, followed by non-essential outlets later in the month. Adding to investor optimism, Novavax Inc. began human testing of its coronavirus vaccine candidate.
Travel and leisure shares took their three-day advance to more than 9%. Besides TUI, U.K. names also outperformed. Cineworld Group Plc jumped 19%, while British Airways parent IAG SA and and EasyJet Plc also climbed 19% or more.
“Travel & leisure are leading the charge today,” said Neil Wilson, chief market analyst at Markets.com. “Strength in this sector underscores confidence among investors that economies are reopening, and consumers are keen to travel. There is a lot more hope that travel restrictions across Europe will be eased in time for the summer holidays.”
Although a rally since a March low lost steam this month amid bleak economic and corporate updates, and tension over U.S.-China ties, investors have preferred to view the glass as half full, focusing on easing lockdowns and vaccine hopes. The Stoxx 600 is on track for a gain of 2.6% in May.
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