European stocks closed lower; Travel stocks shedding 1.1%
European stocks closed lower on Tuesday despite a backdrop of more positive coronavirus vaccine news from Moderna.
The pan-European Stoxx 600 closed down by around 0.2% provisionally, with travel stocks shedding 1.1% to lead the losses as the majority of sectors and major bourses slid into negative territory.
European stocks had closed higher on Monday as hopes for an effective coronavirus vaccine were further boosted by positive news from Moderna, which announced that preliminary data showed its coronavirus vaccine was more than 94% effective at preventing Covid-19.
The announcement followed similarly positive news last week from Pfizer and BioNTech’s late-stage coronavirus vaccine trial that showed their vaccine was more than 90% effective.
The Moderna news boosted stocks on Wall Street and markets in the Asia-Pacific region overnight, with shares mostly rising in Tuesday’s trading session. But U.S. stocks were in negative territory on Monday as a sharp decline in drug store shares and disappointing retail sales data weighed on the broader market.
In Europe, focus is on the outlook for the EU’s near-term economic recovery after Hungary and Poland blocked the adoption of the 2021-2027 budget and recovery fund on Monday. This was due to the budget law including a clause making access to money conditional on respecting the rule of law.
Corporate earnings remained on the agenda, with easyJet reporting on Tuesday that revenue fell more than 50% in the year to the end of September as the coronavirus pandemic severely impacted the travel industry.
Imperial Brands shares gained more than 7% after issuing a strong 2021 profit outlook, while Intermediate Capital saw its shares climb almost 8% by the afternoon after posting a 29% rise in first-half profit before tax.
At the other end of the European blue chip index, BBVA shares fell over 4% following Monday’s rally on the back of the sale of its U.S. business, with speculation lingering as to a potential tie-up with compatriot Banco de Sabadell. Shares of Sabadell climbed around 7%.