European Stocks Boosted by Banks, Airlines Amid Hopes on Virus
European Stocks Jump as Investors Watch Earnings, Virus Easing
(Bloomberg) --
European equities ended higher on Monday as investors embraced the easing of new coronavirus cases and signs that major economies may soon reopen after lockdowns, while shares in airlines rose on government efforts to help the troubled sector.
The Stoxx Europe 600 Index ended 1.8% higher, with German stocks at the forefront of gains. Deutsche Bank AG rose 13%, the most since Feb. 6, after joining other investment banks in beating first-quarter earnings expectations. Its rival Commerzbank AG climbed 5.9%. Deutsche Lufthansa AG added 10% as it heads into a crucial week to work out a government rescue plan.
The DAX Index advanced 3.1%, as did Italy’s FTSE MIB Index after S&P Global Ratings left the nation’s credit rating unchanged.
Coronavirus deaths slowed in Spain, Italy and France, which all signaled tentative moves to open up their economies. Reported fatalities in the U.K. were the lowest since the end of March.
“The already negative sentiment and the light positioning of investors make a sharp market slump unlikely, at least in the short term, unless something unexpected happens,” said Ulrich Urbahn, head of multi-asset strategy and research at Joh Berenberg Gossler & Co. “After the strong equity rally over the past four weeks, we have now reduced our temporary equity overweight to neutral. The upside potential should be limited in the short term, while the risks are still numerous.”
The Vstoxx Index slumped 14% to the lowest level since March 5, signaling that volatility in European equity markets is falling back after a surge in March.
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