European markets leap further ahead as investors buoyed by COVID-19 vaccine hopes

WATCH: European and Asian markets rise on COVID-19 vaccine hopes

European stocks continued Asia’s rally over the prospect of a COVID-19 vaccine kickstarting the global economy on Tuesday.

Strong Asian data underpinned positive market news, including China’s November Caixin manufacturing PMI beating estimates at 54.9 (vs 53.5 expected), the highest reading in 10 years. Further, Japan’s final manufacturing PMI came in 0.7pts above the flash at 49.0.

The European Stoxx 600 index (^STOXX) was up 0.7% at market close. The FTSE 100 (^FTSE) gained 1.9% in London, driven higher by house builders as data from mortgage lender Nationwide showed average transaction prices in November were up 6.5% year-on-year, and up 0.9% month-on-month to an average of £229,721 ($307,408).

The CAC 40 (^FCHI) rose 1.1% in Paris and the export-focused DAX (^GDAXI) was boosted 0.7%.

US stocks were also in the green in mid-day trading. The S&P (^GSPC) was 1.2% higher, Dow Jones (^DJI) was up 0.8% and the Nasdaq (^IXIC) gained 1.2%.

Expectations of continuing fiscal and monetary support came from the US Federal Reserve. Chair Jerome Powell said in a testimony released ahead of Tuesday’s hearing before the Senate Banking Committee that the “US economy remains in a damaged and uncertain state,” though recent news on the vaccine front “is very positive for the medium term.”

In an investment note on Tuesday, Goldman Sachs also urged clients to buy UK stocks and go long on the pound as it predicted UK GBP will bounce back by 7.1% in 2021.

“There is no doubt that global equities have recorded their best month since 1982, and it is very likely that we may see traders keep pushing equities higher as there are more reasons to be bullish for the next 12 to 18 months than bearish,” says Naeem Aslam, chief market analyst at AvaTrade. “One of the biggest reasons to remain positive is that life could be returning to normal in a few months as we do have a coronavirus vaccine.”

Moderna (MRNA) announced that it would be requesting an ‘emergency use authorisation’ from the FDA in the US, as well as a conditional marketing authorisation with the European Medicines Agency. The efficacy of that company’s vaccine is about 94%. The news sent company shares up over 20% on Monday. US pharma giant Pfizer (PFE) and its German partner BioNTech (BNTX) submitted their COVID-19 vaccine for conditional approval to the European Medicines Agency (EMA) on Tuesday.

WATCH: Moderna applies for emergency COVID vaccine approval

Novavax (NVAX) has also announced that the company’s study in the UK has reached full enrollment and results are expected soon, which also sent shares surging over 10% higher. Axios also reported overnight that the White House has summoned the US FDA chief Stephen Hahn to explain why he hasn’t moved faster to approve the Pfizer (PFE) vaccine.

Meanwhile, the UK saw its seven-day average of confirmed cases fall below 15,000 for the first time since mid-October. The news comes ahead of the regional tier system coming back in England on Wednesday as the UK-wide lockdown ends on Tuesday.

France saw its lowest daily rise in cases since August. Meanwhile, Turkey has announced a nationwide weekday curfew starting at 9pm and ending at 5am as the country copes with about 30,000 new cases per day. The American daily case count is being undermined by lower testing capacity around the Thanksgiving holiday weekend.

A Brexit impasse still appears to remain as we enter the final month of the transition period, which is set to end at 11pm London time on 31 December. While there are scant signs of progress, a source with the bloc told Reuters that trade talks over the weekend were “quite difficult” and “massive divergences” remain on the most thorny elements of fisheries, economic fair play and settling disputes.

Finally, Bitcoin reached an all-time high on Tuesday, though it has yet to break its resistance level at $20,000.

The Shanghai Composite (000001.SS) in China gained 1.8%, and the Shenzhen Component (399001.SZ) was up 1.9%.

The Hong Kong Hang Seng (^HSI) gained 0.9%, and Japan’s Nikkei (^N225) went up 1.3%.