European shares gain on hopes of global COVID-19 recovery
European shares rose on Monday on the back of a global recovery from the COVID-19 outbreak. In addition, investors were relieved after the U.S.’ response to China’s security laws were not as severe as many had predicted.
U.S. President Donald Trump had commenced the ending of special treatment for Hong Kong to punish China. However, Trump did not specify further actions that could undermine the U.S.-China Phase One trade agreement.
The pan-European STOXX index gained 0.6%, closing in on its strongest level since March 9. Stocks from banks, miners, and travel & leisure companies led the rally.
Global markets started strong in June, with the STOXX index regaining nearly 31% of its lows from March. Hopes of a COVID-19 vaccine, easing quarantine measures, and expectations of more stimulus helped in improving risk appetite.
Investors will be eyeing a European Central Bank (ECB) meeting that is scheduled on Thursday, with an expectation that policymakers will ramp up its bond-buying program.