European stocks climb, tracking gains on Wall Street; Bayer down 11%

The pan-European Stoxx 600 climbed 0.6% in early trade, retail stocks adding 1.6% to lead gains as all sectors and major bourses entered positive territory.

The mood among European markets is following a trend in the U.S., where stock futures rose slightly in overnight trading as investors braced for the start of the fourth quarter with hopes of fiscal stimulus.

Dow futures rose 115 points. S&P 500 futures and Nasdaq 100 futures ticked up 0.25% and 0.3%, respectively.

On Wednesday, the Dow Jones Industrial Average climbed more than 300 points, after being up more than 550 points on hopes the White House and Senate would agree to a second stimulus package. The vote was delayed, however, after House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed to strike a coronavirus aid deal; although the pair said talks would continue.

Meanwhile in Asia, Japan’s Tokyo Stock Exchange halted trading on Thursday due to a technical issue, while many major markets in the region (those in China, Hong Kong, South Korea and Taiwan) are closed for holidays.

The pandemic continues to dominate investor sentiment with news on potential coronavirus vaccines being followed closely. Drugmaker Moderna’s CEO has said he doesn’t expect to apply for an emergency use authorization with the Food and Drug Administration for the company’s potential Covid-19 vaccine until after the U.S. presidential election on Nov. 3.

Speaking to the Financial TimesCEO Stephane Bancel said: “November 25 is the time we will have enough safety data to be able to put into an EUA [emergency use authorization] file that we would send to the FDA — assuming that the safety data is good, i.e. a vaccine is deemed to be safe,” he said.

On the data front, a slew of European countries’ final readings of September PMI data is released and the euro zone unemployment rate for August is due.

Biggest movers

Earnings were a key driver of individual share price movement on Thursday morning, with French-Italian chipmaker STMicro and Swedish retailer H&M both climbing more than 6% after beating third-quarter forecasts.

At the bottom of the European blue-chip index, Bayer shares plunged more than 11% after the German pharmaceutical giant announced further cost cuts and impairment charges, revising down its guidance.