European Stocks Rise as U.K. Scraps Lawbreaking Brexit Clauses

(Bloomberg) -- European stocks advanced after the U.K. government decided to drop controversial clauses that would rip up parts of the Brexit divorce agreement, increasing the chances of progress in talks.

The Stoxx Europe 600 Index was up 0.2% by the close in London, with media and personal care, drug and grocery stores sectors leading the gains. The FTSE 100 Index was little changed, having earlier declined as much as 0.6%, and the FTSE 250 slipped 0.3% as the pound weakened.

Talks over the future trading relationship between the U.K. and the European Union remain deadlocked, but news of a resolution to the three-month row over clauses in the U.K. Internal Market Bill may help ease the discussions.

Investors are also on the lookout for further stimulus measures from Thursday’s European Central Bank meeting, as the pandemic threatens to hobble the recovery.

“So the waiting continues as Brexit and ECB council meeting remain the focus events for investors,” said Andreas Lipkow, a market strategist at Comdirect Bank.

HSBC Holdings Plc dropped 2.7%, one of the biggest decliners in the Stoxx 600 Index on Tuesday. The bank was criticized for freezing the accounts of a former pro-democracy lawmaker in Hong Kong and a local church that’s helped protesters.

AstraZeneca Plc gained 0.8% after a vaccine developed by the University of Oxford and the drugmaker provided protection against severe Covid-19, a peer-reviewed study showed, though more analysis will be needed to see how well it works in older people, among those at highest risk in the pandemic.

European equities are up about 1% in December after rallying the most on record in November in the shadow of the pandemic. In Germany, the eastern state of Saxony plans to close all non-essential shops as it grapples with the country’s highest rate of infection. In addition to the rise in virus cases, progress on U.S. stimulus talks has stalled in recent days, adding to investor concerns.

©2020 Bloomberg L.P.