European Equities Inch Higher Following Monday’s Market Slump

(Bloomberg) -- European equities ended slightly higher on Tuesday following the previous session’s selloff, with investors cautious about the region’s response to the resurgent pandemic as the U.K. announced stricter measures.

The Stoxx Europe 600 Index closed up 0.2% in London, with energy shares the best performers. Insurers and travel & leisure stocks were the biggest laggards, both extending their decline this week to 6.2%.

With volumes returning from a summer lull, equities in the region slumped the most since June 11 on Monday amid mounting signs that Europe’s coronavirus outbreak is once again reaching a scale that would require disruptive lockdown measures. Stocks that stand to gain from a slowdown in public life, such as meal-kit maker HelloFresh SE and video-game makers Ubisoft Entertainment SA and CD Projekt SA bucked the trend on Monday and continued rising on Tuesday.

Doubters of a V-shaped recovery have been vindicated as Europe looks set to go in and out of pandemic-related restrictions “for 6 months, 12 months, two years, who knows,” CMC Markets analyst David Madden told Bloomberg by phone. Technology stocks, which suffered a correction earlier this month, may see renewed upside if the region brings back tighter restrictions, Madden added.

Dubai-based payments provider Network International Holdings Plc gained the most among members of the benchmark. U.K. specialist insurer Beazley Plc posted the biggest decline, after doubling its forecast for the cost of Covid-19 claims. Generic drug maker Hikma Pharmaceuticals Plc also dropped, after facing a setback in the approval process for a new product.

©2020 Bloomberg L.P.