European Stocks’ Worst Quarter Since 2002 Ends on Positive Note
European Stocks’ Worst Quarter Since 2002 Ends on Positive Note
(Bloomberg) -- European stocks closed higher on the final day of their worst quarter since 2002 on optimism over signs that the spread of the coronavirus is stabilizing in Italy.
The Stoxx Europe 600 Index added 1.7% at the close, trimming its quarterly slide to 23%. Energy and travel & leisure shares led the advance on Tuesday, with banking and telecom shares the only two sectors in the red.
The benchmark has bounced back since a mid-March low, recouping about a quarter of the losses seen in the sell-off that began after the virus spread to Italy. The country is now reporting the fewest new infections in almost two weeks, with the World Health Organization saying the outbreak in Europe might be approaching its peak. But numbers continued to rise elsewhere, with Spain having its deadliest day yet.
All 19 Stoxx 600 groups are down in the first quarter, with travel and leisure shares slumping the most. Still, stocks have risen in recent sessions, boosted by unprecedented stimulus measures from Europe to the U.S. aimed at cushioning the economic blow from the pandemic.
“The bounce we’ve had has come from very oversold levels, and you do get massive rallies in falling markets,” Peel Hunt strategist Ian Williams said by phone. Given that there’s not much more central banks and governments can do in terms of stimulus, Williams says investors will have to wait for the virus case data to improve.
Country-wise too, every major western European benchmark fell in the first three months of 2020, with those in the periphery among the biggest losers. Gauges in Italy, Spain and Greece were more than 25% lower.
Companies on Tuesday continued to shed light on the fallout from sweeping lockdowns being enforced across Europe to curtail the spread of the virus. Advertising firm WPP Plc suspended its dividend and share buyback, although the shares still gained as analysts highlighted large savings.
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