European stocks rally on news that coronavirus pandemic may be easing.

European shares rallied for the second day in a row on Tuesday with investors being encouraged by early signs that the coronavirus pandemic may be easing.

The pan-European STOXX 600 index rose 3.1% to its highest level in nearly a month, with Spanish and Italian stocks surging 3.4% and 4.5%, respectively, after reported slowdowns in new infections in Italy, Spain and hard-hit parts of the United States.

“We see this rally as a necessary part of price discovery and finding a new bottom,” said Andrea Cicione, head of strategy at TS Lombard in London.

“The initial stage was the shock and we’ve gone through that when the market was selling off every day. We are now transitioning to phase two, which is the consequences of the lockdowns.”

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