ROME: Europe’s stock benchmark climbed Monday, rebounding from its steepest loss in two weeks thanks in part to optimism after Greece’s election.
Drug makers also provided a lift, offsetting Volkswagen AG’s drag as the auto maker’s shares plunged as its emission-test scandal deepened VOW3, -18.19%
The Stoxx Europe 600 SXXP, +0.86% rose 0.9% to end at 357.83, after closing on Friday with its largest one-day loss since Sept. 4. Friday’s slide came after the U.S. Federal Reserve cited concerns about a slowdown in the global economy in its decision to keep interest rates at a record low.
European equities are “bouncing back following the re-election of Syriza in Greece, which is expected to pave the way for the passage of key reforms,” said Colin Cieszynski, chief market strategist at CMC Markets, in a note Monday. Read: ‘Grexit’ risks fade after Tsipras wins Greek election
Movers: The pharmaceutical sector helped prop up the pan-European benchmark, with heavyweight Novo Nordisk AS NOVOB, +2.88% NVO, +0.11% up 2.9% after Swedbank lifted the Danish insulin maker to strong buy from buy.
Shares of Shire PLC SHP, +1.05% SHPG, -1.27% climbed 1.1% after the company’s Intuniv drug won European approval for use as a non-stimulant drug for attention deficit hyperactivity disorder (ADHD) in children and adolescents.
On the downside, shares of Volkswagen AG VOW3, -18.19% VOW, -17.14% VLKAY, -17.10% plunged 19% after the German car maker halted U.S. sales of popular diesel-powered cars and issued an apology for violating customers’ trust.
The sharp loss weighed on the German DAX 30 index DAX, +0.33% which with a gain of 0.3% at 9,948.51 rose less than other major country-specific benchmarks.
“The Dax is trailing its continental peers today, held back by a 20% drop in Volkswagen following weekend news that it cheated on emissions test results potentially leading to a massive recall and brand damage,” CMC’s Cieszynski said.
