European Stocks Post Longest Weekly Winning Streak Since July
(Bloomberg) -- European equities climbed, posting their longest weekly winning streak since July as investors resumed a rotation into economically sensitive sectors on optimism about coronavirus vaccines.
The Stoxx Europe 600 Index added 0.5% at the close, with miners and energy shares leading the advance. The benchmark is trading near a nine-month high, and is up for a third straight week.
“Will 2021 be a good year for European equities? Yes, in our view,” Societe Generale strategists led by Roland Kaloyan wrote in a note. “Like a rising tide lifting all boats, all the laggards have rebounded. Looking ahead, the market is likely to be more selective and companies with structural issues may be left behind.”
Among notable movers, Sage Group Plc slid 13% after forecasting slower recurring sales growth in 2021. Meanwhile, Banco BPM SpA advanced on speculation of a potential combination with Italian lender BPER Banca SpA.
The Stoxx 600 has now recovered more than two-thirds of its pandemic-induced declines. Virus losers including banks and energy shares have rallied strongly, up more than 27% each in November.
“With vaccines newsflow accelerating, investors are rediscovering that diversification is key,” said Oddo BHF strategist Sylvain Goyon. “That trend will undoubtedly continue, and with it the value/cyclical rotation, but it may not be a smooth ride.”
©2020 Bloomberg L.P.