(Reuters) - European shares turned higher on Monday, helped by encouraging data from an array of coronavirus vaccine candidates and after EU leaders sketched a framework agreement on a recovery fund to stimulate the pandemic-stricken euro zone economies.
An index of eurozone shares .STOXXE rose 0.9% reversing all of its opening losses, with the euro jumping to a four-month high.
An experimental coronavirus vaccine being developed by AstraZeneca (AZN.L) and Oxford university was safe and produced an immune response in its first human trial, while U.S. drugmaker Pfizer (PFE.N) and German biotech firm BioNTech (BNTX.O) also provided additional promising data.
The pan-European equities index also reversed course to rise 0.8% after German Chancellor Angela Merkel said leaders now had a new basis for a deal on a 750 billion euro (678.3 billion pounds) recovery fund and the bloc’s next 2021-2027 common budget, worth around 1.1 trillion euros.
Defensive healthcare index .SXDP rose the most in Europe, up 1.2% as signs emerged that leaders of northern European Union countries were willing to compromise on the recovery plan as talks in Brussels extended to a fourth day.
Euro zone markets have rallied since an initial Franco-German proposal was announced in mid-May, but the plan has met with resistance from the “frugal” states led by the Netherlands over the size of grants doled out to the worst-affected states.
“The fact that EU leaders are willing to come back for the fourth day is to all appearances a good sign,” Stephen Innes from Axicorp wrote in a client note.
“It signals a will power get something through, rather than resorting to another summit over the next couple of weeks.”
European markets had opened lower, with travel & leisure .SXTP falling 0.9%, the biggest sectoral decliner in Europe, while oil & gas companies .SXEP and miners .SXPP dropped 0.3% each.
Chris Bailey, a European strategist at Rayond James said, “People - especially non-European investors - have been disappointed so much by Europe that they need confirmation.”
“Slower money will wait for confirmation to buy stocks.”
In individual stock moves, Swiss wealth manager Julius Baer Gruppe AG (BAER.S) declined 3% as it reported a 6% drop in assets under management from end-2019 in the six months through June.
Dutch health technology company Philips NV (PHG.AS) gained 5.3% as it expected to return to growth in the second half of the year.
Reporting by Sruthi Shankar, Sagarika Jaisinghani and Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta and Keith Weir