Europe Markets: European stocks climb amid hopes for a breakthrough in fighting coronavirus

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European stock markets shook off early losses and moved firmly higher on Wednesday, helped by a strong session on Wall Street and fresh hopes that researchers could be nearing an effective treatment for the coronavirus.

Several updates on the corporate front were moving individual stocks.

The Stoxx Europe 600 index SXXP, +1.07%  rose 1.1% to 423.36. The index rallied 1.6% to 481.47 on Tuesday, marking the biggest one day gain since October 11. The German DAX 30 index DAX, +1.17% rose 1.3%, on the heels of a 1.8% gain—its largest rise since October 11 as well.

The French CAC 40 index PX1, +0.86% gained 1%, while the FTSE 100 index UKX, +0.73%  added 0.7%.

Data in Europe showed the January services purchasing managers index came in at 52.5, slightly higher than expected. The eurozone composite PMI rose to 51.3 from a flash estimate of 50.9. U.S. data will draw attention on Wednesday as well, with the ADP employment report ahead of Friday’s nonfarm payrolls data and a nonmanufacturing Institute for Supply Management survey.

Dow futures YM00, +0.81%  surged 0.8% and oil prices CL00, +2.32%  over 2% after an unconfirmed report that researchers at Zhejiang University had zeroed in on two drugs to successfully fight the coronavirus. Separately, Sky News reported progress in the U.K. on creating a vaccine.

Wall Street stocks rallied on Tuesday, with the technology-heavy Nasdaq COMP, +2.10%  benchmark logging a record close, helped by another surge for shares of electric-car maker Tesla TSLA, +13.73%. Investors were cheered in part by stimulus efforts from China to help combat the deadly coronavirus.

That is as the death toll from the new virus rose to 490 in mainland China and the number of new cases increased to 24,324, with four new cases in Hong Kong and thousands quarantined on a cruise line owned by Carnival Corporation CCL, +1.41%  in Japan. Shares of Carnival rose 0.4%.

Leading the downside, shares of Imperial Brands IMB, -6.85%  slumped 8% after the tobacco group said it expects almost no change in revenue for fiscal 2020 from the previous year, as it cited difficulties in its vaping segment due to U.S. Food and Drug Administration bans on certain flavors of its cartridge-based vapor devices.

Shares of Infineon Technologies IFX, +8.85%  rallied 8%. The German chip maker said net profit and revenue for the first quarter of its fiscal year fell amid a difficult environment. But analysts were encouraged after the company said it continues to expect year-over-year revenue growth of 5% for 2020.

“IFX confirmed demand is normalizing and channel inventories are largely back to normal levels—we view these comments as reassuring,” said Amit B Harchandani, analyst at Citi, in a note to clients.

Shares of Siemens SIE, +0.40%  rose 1% after the German engineering conglomerate reported first-quarter net profit and revenue rose, and it backed its full-year guidance. The company said late on Monday that it will acquire Iberdrola’s IBE, -0.22%  stake in the joint-business Siemens Gamesa Renewable Energy SGRE, +3.68%  for EUR1.1 billion.

BNP Paribas BNP, +0.57%  cut its profitability target for this year as fourth-quarter net profit rose 28%. Shares rose 1.1%.

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