BRUSSELS/FRANKFURT/PARIS (dpa-AFX) - European markets closed on a buoyant note on Tuesday with investors going on a buying spree as sentiment improved after the U.S. Federal Reserve expanded its bond-buying program, and on reports about the Trump administration's plan to draw up a huge infrastructure package.
News about discovery of a new drug to treat seriously ill coronavirus patients, and encouraging U.S. retail sales data amid reopening of businesses contributed as well to the upbeat mood in global markets.
According to reports, a drug called dexamethasone had been discovered to drastically reduce the death rate for patients seriously ill with coronavirus.
Later in the week, a meeting of the European Council will see EU leaders discussing a common recovery fund and a new EU long term budget.
The pan European Stoxx 600 climbed up 2.9%. The U.K.'s FTSE 100 gained 2.94%, Germany's DAX rose 3.39% and France's CAC 40 surged up 2.84%, while Switzerland's SMI moved up 1.95%.
Among other markets in Europe, Austria, Belgium, Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden and Turkey, all ended on a high note with their benchmark indices gaining 1 to 4%.
In the U.K. market, Ashtead Group rallied more than 9% after the company maintained its dividend despite reporting a sharp fall in its fourth-quarter profit.
Ferguson, Informa, Carnival, CRH, Barclays, IAG, EasyJet and Imperial Brands gained 5 to 8%.
Prudential, Melrose, Royal Bank, Bunzi, British American Tobacco, Diageo, Lloyds Banking Group, Smurfit Kappa Group, Vodafone, Rolls-Royce Holdings, Standard Chartered, Aviva, BT Group and Royal Dutch Shell also closed with strong gains.
In the German market, HeidelbergCement climbed up more than 6% and Bayer notched up a gain of 5.5%. Thyssenkrupp, Henkel, Siemens, Fresenius, SAP, Adidas, Daimler, Fresenius Medical Care, BASF, Allianz, Deutsche Telekom, Deutsche Bank, Infineon Technologies and Merck gained 2.7 to 5%.
In France, ArcelorMittal gained more than 7% and Technip rose 6.6%. Valeo, BNP Paribas, STMicroElectronics, LOreal, Orange, Danone, Bouygues, Credit Agricole, Engie, Societe Generale, Pernod Ricard and Renault moved up 3 to 5.4%.
Peugeot, Sodexo, Cap Gemini, Veolia and Airbus also moved up sharply. EasyJet said it would take delivery of 24 Airbus planes between 2025 and 2027.
In economic releases, German investor sentiment rose more than expected in June on hopes that the economy will bottom out by summer 2020, a survey showed.
The ZEW research institute's economic sentiment index rose to 63.4 from 51.0 in May. Economists had expected a reading of 60.0
According to final data from Destatis, German consumer price inflation eased for a third straight month in May to the lowest since 2016, rising 0.6% in the month, following a 0.9% increase in April. On a monthly basis, consumer prices dropped 0.1% in May, as estimated.
The U.K. jobless rate was unchanged from the previous quarter, while earnings growth slowed sharply in the three months to April, when the economy entered a lockdown for a large part to slow the spread of the coronavirus, preliminary data from the Office for National Statistics showed.
Switzerland's economy is set for its worst slump since 1975 this year due to the impact from the coronavirus and a revival is likely in the second half of the year, if there is no second wave of the pandemic, the Federal Government's Expert Group said in a report released on Tuesday.
Gross domestic product adjusted for sporting events is forecast to fall by 6.2% this year, which is slightly better than the 6.7% decline predicted in April, the State Secretariat for Economic Affairs, or SECO, said. The unemployment rate is expected to average 3.8% this year.
Copyright RTT News/dpa-AFX