European Stocks Rise Most in Two Weeks on Easing Lockdowns, Oil
European Stocks Rise From Two-Week Low on Easing Lockdown Norms
(Bloomberg) --
European stocks rose the most in more than two weeks as many major economies moved toward easing lockdown restrictions and oil shares rallied.
The Stoxx Europe 600 Index was up 2.2% at the close, with all 19 industry groups gaining. Energy shares jumped as Total SA and Repsol SA rallied following updates in which the companies refrained from dividend cuts, while Brent crude topped $30 a barrel for the first time since April 15. Financial services and carmakers also outperformed.
A rebound in European stocks from a March low had lost steam in recent sessions as fresh U.S.-China tensions and gloomy data made investors risk averse. The Stoxx 600 has struggled to break above its 50-day moving average. Still, shares are getting fresh impetus after Italy began to reopen its economy, Spain started to relax its restrictions and the U.S. states of California and Arizona also took steps toward restarting activity.
“Investors are taking stock of the gradual reopening of economies, whilst oil also picks up on greater fuel demands,” wrote Fiona Cincotta, a market analyst at City Index. “Optimism surrounding the gradual easing of lockdown restrictions and the impending economic recovery is outweighing rising U.S.–Chinese tensions, which had dragged on sentiment in trading on Monday.”
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The Stoxx 600 earlier trimmed its advance after Germany’s top judges gave the European Central Bank three months to fix its asset purchase program, saying some parts of it aren’t backed by European Union treaties.
“This verdict is exciting in the way that the ECB has to deliver an explanation on disproportional action with three months, which I believe is impossible,” said Uwe Maderer, head of fixed income at LBBW Asset Management. “I don’t know what the ECB is expected to do or say here or how to change the program. One could now say this is bad for bunds, but it actually poses an increased risk for a euro break-up which is barely priced into markets.”
Among other notable movers, BNP Paribas SA climbed after analysts praised its results as resilient and said its outlook beat consensus estimates.
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