Stock markets rallied in Europe on Tuesday, reversing the sell-off seen late in the previous session.
The performance followed big declines for stocks on Monday. A jittery open on Wall Street left the DAX and CAC down 1.6% by the end of the day, while the FTSE shed 0.8%.
“The see-saw price action between buyers and sellers continues, with yesterday’s swift dip being replaced by a recovery that leaves indices roughly where they started the week,” said Chris Beauchamp, chief market analyst at IG.
“The rally since November has slowed noticeably, but it has yet to move to the downside, and instead most indices are content to tread water.”
UBS (UBSG.SW) rose 2.4% in Zurich after beating analysts’ forecasts with fourth quarter results and announcing plans for a $4.5bn (£3.3bn) share buyback programme.
Rolls Royce (RR.L) fell 1.7% in London after warning the return of travel restrictions around the world meant it was on track to burn through £2bn in cash this year — £500m more than City forecasts.
Investors were left unperturbed by the resignation of Italian Prime Minister Giuseppe Conte after a week of political crisis. Conte will stay on as caretaker until a new government can be formed. Italian government bond yields fell across the board and the FTSE MIB (FTSEMIB.MI) rose 1.1% in Milan.
Despite the general mood of optimism, Jim Reid, a senior strategist at Deutsche Bank, said markets were being stalked by fears about the COVID-19 vaccine rollout.
“It’s becoming clearer to us that although vaccines will likely be a huge saviour as expected, countries are going to be more hesitant to remove restrictions than we thought a couple of months ago due to perceived threats of mutations evading vaccines,” Reid wrote in a morning note.
“I’m now increasingly expecting countries to have stricter border controls around the middle of this year than many did for large parts of last year, even with high vaccination rates. The desire to avoid imported mutations seems to be increasing.”
Reports suggest the UK will today announce plans for quarantine hotels for some travellers coming to England. Local media reports suggest France could announce new lockdown measures in the coming days.
Meanwhile, concerns are growing about supplies of COVID-19 vaccines. In a speech on Monday evening, the EU’s health chief said AstraZeneca (AZN.L) was now going to “supply considerably fewer doses in the coming weeks than agreed” and accused the pharmaceutical giant of diverting supply elsewhere.
“The European Union will take any action required to protect its citizens and rights,” EU Health Commissioner Stella Kyriakides said in a statement late on Monday.
Tuesday lunchtime saw EU President Ursula von der Leyen announced plans for export controls on vaccines produced in the EU in response.
WATCH: EU seeks supply answers from AstraZeneca
Action on Wall Street was quiet amid question markets over a new stimulus package.
“Senate majority leader Schumer said it may take 4-6 weeks for the new US stimulus plan to pass, which seemed to remind markets of the underlying risks to a market trading at the highs,” said Reid.
Asian markets sold-off overnight on concerns about delays to US stimulus checks. Japan’s Nikkei (^N225) fell 1% and the South Korean KOSPI (^KS11) dropped 2.1%. China’s Shanghai Composite (000001.SS) slid 1.5% and the Shenzen Component (399001.SZ) declined by 2.3%. The Hong Kong Hang Seng (^HSI) was down by 1.5%.