By Sruthi Shankar
(Reuters) – European stocks bounced from a two-week low on Monday as signs of progress in developing a COVID-19 treatment offset fears about a resurgence in virus cases across the continent that could risk stifling an economic recovery.
The pan-European STOXX 600 index () rose 1.3%, mirroring gains for Asian markets after the U.S. health regulator said on Sunday it authorized the use of blood plasma from patients who have recovered from COVID-19 as a treatment.
Spain’s Grifols (MC:), one of the world’s top producers of treatments based on human plasma, gained 3%.
AstraZeneca Plc (L:) jumped 2.5% after the Financial Times reported the Trump administration was considering fast-tracking an experimental COVID-19 vaccine being developed by the company.
“The weekend’s vaccine news is at the fore,” said Keith Temperton, an analyst at Lombard Forte. “But we’re in this mid-summer volume vacuum, where the path of least resistance is higher.”
Oil and gas companies () led the surge in Europe, gaining from a rise in crude prices as storms closed in on the Gulf of Mexico, shutting more than half its oil production. [O/R]
Technology (), mining () and chemical () companies also rose nearly 2%.
British telecoms company BT Group (L:) jumped 4.3% after a media report that its board was preparing to defend it against takeover approaches from rivals and buyout firms.
The gains in European equities come after a lacklustre week that saw data pointing to a stalling business recovery in the euro zone amid a surge in coronavirus cases.
A UK government data showed on Friday the reproduction “R” number of COVID-19 infections had risen and may now be above 1, indicating a risk that the overall epidemic is growing.
Similarly, Germany, France and Spain have seen a surge in virus cases, with their leaders looking at tightening travel restrictions.
“The way we’re looking at the COVID narrative seems to be changing. The market is looking at a better situation in terms of hospitalisation and death rates,” Temperton said.
Shares in British Airways-owner IAG (L:) dropped 0.5% and Air France (PA:) dipped 0.4% after the UK government said travellers to France are required to self-certify that they are not suffering coronavirus symptoms or have been in contact with a confirmed case within 14 days preceding travel.
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