By Sruthi Shankar
(Reuters) - European stocks closed at over a five-week high on Wednesday, with travel stocks surfing a wave of optimism following reports of progress in developing a COVID-19 vaccine.
Hard-hit airline stocks like British Airways-owner IAG
The travel & leisure index <.SXTP> surged 6.1% to lead sectoral gains, but still remains the worst performer in Europe this year with a 33% plunge as the coronavirus pandemic brought global travel to a halt.
The pan-European STOXX 600 <.STOXX> rose 1.8%, closing just short of levels last seen in early March, while euro zone blue-chips <.STOXX50E> jumped 1.7% to hit their highest level since March 5.
Investors were encouraged by an early-stage study on U.S. biotech firm Moderna Inc's
Meanwhile, AstraZeneca
"Our central scenario is that a vaccine would be broadly available from the second quarter of next year, or the fourth quarter of this year in our upside scenario," Mark Haefele, chief investment officer of UBS Global Wealth Management, told clients.
"Various potential treatment options are also in the pipeline, raising hopes that societies can cope with the pandemic without full shutdowns."
Expectations were also high among investors heading into an EU summit later this week that leaders will agree on a recovery fund of 750 billion euros for pandemic-hammered economies.
The European Central Bank concludes its policy meeting on Thursday although no major announcements are expected.
Among individual movers, Swedish telecom operator Tele2 AB
The world's largest fish farmer Mowi ASA
The top gainer on the STOXX 600 was Atlantia SpA
Semiconductor equipment maker ASML Holding NV
Swedish bank SEB AB
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Catherine Evans)