European stock markets rose on Tuesday despite ongoing concerns about Europe's COVID-19 vaccine campaign, rapidly spreading cases in Germany, and disappointing US retail sales figures.
The rise came despite renewed concerns about Europe's COVID-19 vaccine rollout. Multiple countries — including Germany, France, Spain, and Italy — have moved to suspend the administering of the AstraZeneca vaccine following reports of blood clotting.
Germany’s Paul-Ehrlich Institute said it found "a striking accumulation" of rare blood clotting issues associated with the vaccine. The European Medicines Agency (EMA) is currently evaluating data and a verdict is expected on Thursday.
"Reports suggest it is seven serious cases out of 1.6 million doses over six weeks that is causing this," said Jim Reid, a senior strategist at Deutsche Bank. "Further reading suggests one would expect 3-4 cases per million per year of such an issue in the general population."
Reid and his team said the decision to suspend the vaccine looked "very cautious."
Bill Blain, a strategist at Shard Capital, said delays to the EU's vaccine rollout would have "market implications." Travel stocks will struggle to recover until the continent can fully reopen, for example.
Watch: Germany, France, Italy and Spain halt use of AstraZeneca vaccine
COVID-19 cases are once again on the rise in parts of Europe. Germany's Robert Koch Institute on Tuesday said the country was "on the flank of the third wave" with an "exponential growth" in cases, Reuters reported.
However, Pantheon Macroeconomics's chief eurozone economist Claus Vistesen said: "The sub-par vaccination effort isn’t a huge challenge for the overall trend — Germany and the EU will get there in the end — and remember also that the pace of vaccination has accelerated significantly in the past month.
"In addition, we also suspect EZ [eurozone] financial markets, especially equities, are now looking forward to a significant lift from stronger global growth, primarily driven by a stimulus-boosted and fully vaccinated US economy. It could be very tasty indeed for EZ exporters, many of which are key constituents in German and EZ large cap equity indices."
"The further increase in expectations is consistent with market pricing reflecting a reality in which the virus is history and economic activity is quickly moving towards pre-virus level," Vistesen said.
In a separate survey of fund managers published on Tuesday, Bank of America said COVID-19 was nothe number one concern among professional investors for the first time since February 2020. The biggest challenge is now seen as inflation.
French inflation data, published earlier on Tuesday morning, showed prices rising by 0.8% in February. The figure was slightly ahead of forecasts.
AstraZeneca (AZN.L) shares rose 3.2% in London despite the scrutiny of its vaccine. The stock was helped by a rating upgrade to "buy" from Jefferies and a bullish note from Deutsche Bank.
Stocks were unmoved by weaker than expected US retail sales data, published around lunchtime in Europe. Official figures showed sales dropped by 3% in February, against expectations of a 0.5% decline.
"This shouldn't be alarming," said James Knightley, chief international economist at ING. "January's stimulus-payment-induced surge was revised even higher and with another stimulus cheque hitting bank accounts and the weather situation having improved, the numbers for March and April will surge."
Asian markets booked solid gains overnight following a late rally on Wall Street on Monday. Japan's Nikkei (^N225) rose half a percent, the Hong Kong Hang Seng (^HSI) gained 0.6%, and the Shanghai Composite (000001.SS). South Korea's KOSPI (^KS11) rose 0.7% and Australia's ASX 200 (^AXJO) gained 0.8%.
Watch: Should I be concerned about the Oxford/AstraZeneca vaccine?