(Bloomberg) --

European equities surged on Monday on the optimism that death tolls from coronavirus are falling in several hotspots of the health crisis.

The Stoxx Europe 600 Index jumped 3%, led by automakers, travel and leisure and insurance sectors.

While coronavirus remains a major health crisis, New York state fatalities fell for the first time, Italy had the fewest deaths in more than two weeks, while France reported the lowest number in five days and Spain’s tally fell for three days in a row. At the same time, U.S. President Donald Trump warned that a “very horrendous” phase in the pandemic is approaching and companies are reducing their guidance and suspending dividends because of the economic damage from the virus.

“Investors are focusing on the optimism that there’s a stabilization in the rate of deaths from the virus and on the first-quarter reporting season where they hope to get more visibility,” said Ulrich Urbahn, head of multi-asset strategy and research at Joh Berenberg Gossler & Co. “In the long term, there are many reasons not to be too pessimistic: in addition to the massive stimulus measures and the enormous relative attractiveness of equities, the dry powder of many investors -- the holdings in money-market funds -- have reached a record level.”

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