European markets react as EU leaders reach recovery fund deal

Michelle K. Wallace

European stocks are expected to open higher Tuesday after European Union (EU) leaders reached a deal on a 750 billion euro ($857 billion) recovery fund to help the region recover from the coronavirus crisis. London’s FTSE is expected to open 10 points higher at 6,271, Germany’s DAX is seen 53 points higher […]

European stocks are expected to open higher Tuesday after European Union (EU) leaders reached a deal on a 750 billion euro ($857 billion) recovery fund to help the region recover from the coronavirus crisis.

London’s FTSE is expected to open 10 points higher at 6,271, Germany’s DAX is seen 53 points higher at 13,108, France’s CAC 40 is seen 13 points higher at 5,107 and Italy’s FTSE MIB up 138 points at 20,734, according to IG.

EU heads of state had been locked in talks since Friday morning to discuss the proposed recovery fund and the EU’s next budget, but there had been deep divisions over the size and composition of the fund. Early Tuesday morning, however, the leaders reached a breakthrough agreement.

European Council President Charles Michel said he believes this deal will be seen as a “pivotal moment” for Europe. “We did it! Europe is strong. Europe is united,” he said in an early Tuesday press conference announcing the agreement. “These were, of course, difficult negotiations in very difficult times for all Europeans.”

Positive news in the hunt for a coronavirus vaccine is also likely to buoy market sentiment in Europe again Tuesday. Asia Pacific markets mostly rose Tuesday after investor sentiment was supported by a slew of positive news on the coronavirus vaccine front. 

Pfizer and BioNTech reported early positive data on a joint coronavirus vaccine Monday and another candidate from Oxford University and AstraZeneca also showed a positive immune response in an early trial. The coronavirus has now infected more than 14.6 million people worldwide and killed over 608,000.

Earnings come from UBS, Novartis, Volvo Cars and Remy Cointreau, among others. There are no major European data releases Tuesday.

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