European shares rose on Monday February 22 as mining stocks rallied on the back of strong Chinese economic data with optimism over COVID-19 vaccine progress also helping sentiment. The travel and leisure sector experienced a boost following a report on Friday that the UK could lift COVID-19 restrictions by the end of June leading to a surge in demand for summer holidays. The pan-European STOXX 600 index climbed 0.5% to its highest level in almost a year with mining stocks in particular leading the gains with a 1.8% increase.
Chinese data showed that industrial output surged 35.1% year-on-year in January and February outstripping the 7.3% growth forecast by analysts. Retail sales also rose higher than expected increasing by 33.8%. The news was particularly reassuring for mining companies as China is one of the biggest global consumers of metals. BHP Group Rio Tinto and Anglo American all gained around 2.5% contributing to the FTSE 100 index’s 0.6% rise to an 11-month high.
The upbeat vaccine outlook also boosted investor sentiment with reports that the US should deliver 100 million vaccines by the end of March raising hopes of an end to the pandemic. Meanwhile Moderna has announced that trials of its vaccine showed 100% efficacy in teenagers aged between 12 and 17.
The travel and leisure sector received a welcome lift on Friday when the UK government announced its roadmap for lifting COVID-19 restrictions. According to the plan all restrictions could be lifted by the end of June leading to a surge in demand for summer holidays. Airlines including easyJet Ryanair and TUI all rose sharply on the news with travel and leisure stocks continuing to climb on Monday.
The pan-European travel and leisure index rose 1.1% led by gains in British Airways owner IAG and engine maker Rolls-Royce. The German DAX and the French CAC 40 indices were both up 0.6%.
