European shares will be sealed in the fourth consecutive month of earnings

European stocks will record their fourth consecutive month of gains as confidence in the region’s economic recovery increases and the vaccination program accelerates.

MSCI’s broad share of shares across Europe has risen nearly 4 percent since the end of April, and gains so far have been 12 percent in U.S. dollars. Courses in Frankfurt, Paris, Madrid, Milan and London have risen this month.

Although the EU vaccination program has lagged significantly compared to other regions, efforts by major countries to accelerate deployment have boosted traders ’confidence. At the same time, economists predict a large economic rise this year.

As a sign of improving outlook, the latest European Economic Indicators Survey released by the European Commission on Friday showed that confidence across the eurozone in May was “significantly above the long-term average and pre-pandemic levels”.

ESI data “confirmed that the eurozone economy is bouncing rapidly from the blockages as vaccines grow and the summer season is approaching,” said Oxford Economic economist Daniela Ordonez.

Spanish and Italian equities – the two countries that hit hard at the height of the coronavirus crisis – have been particularly good this month. The Spanish MSCI index rose 6 percent in dollars and the Italian index rose 5.5 percent. Yields faded this month as the euro strengthened against the dollar.

Investors and economists have similar bloody views in the UK, where the spread of coronavirus vaccines has been faster than in continental Europe and the government has removed many social barriers.

“We believe that UK stocks generally provide good value for global investors,” said European strategist Sharon Bell of Goldman Sachs. “Since the beginning of this year, at least since 2016 we have seen the strongest inflows of foreign investors into UK stocks.”

The MSCI’s UK index gained 3.4 per cent in May, an increase of the pound against the US dollar.

It seems that stocks in the UK and mainland Europe are less expensive than those on Wall Street, making these markets more attractive, investors said.

According to Goldman Sachs, MSCI’s European stock index is trading about 17 times the expected profit next year. That’s above the median for the last 10 years, but the projected gains are much more expensive than U.S. stocks trading 23 times closer.

Bank of America said in a note last week that it remains “positive on European equities,” despite big gains this month. The bank has suggested that customers take “overweight” positions in stocks that are often linked to economic performance, such as banks and luxury goods sellers, as the region’s economic recovery continues.

Negotiations eased on Monday, with both the UK and the US closed for the holidays. Reference indices for reference stocks in Germany, France, Spain and Italy changed little.