European Stocks Rise on U.S. Stimulus Optimism, Company Updates

(Bloomberg) -- European equities rose on Friday, posting a second consecutive weekly gain amid U.S. stimulus optimism and positive corporate guidance updates.

The Stoxx Europe 600 index closed 0.6% higher, led by travel and leisure, and tech shares. U.S. President Donald Trump approved a revised stimulus offer after walking away from talks earlier this week, his top economic adviser said, after the European market close. Stocks had rallied earlier on speculation Trump was leaning toward a large-scale stimulus bill.

European stocks finally broke out of their 200-day moving average on Thursday, a technical level that’s been capping gains since July. The Stoxx 600 rose 2.1% this week, the most in almost four months.

“The lower level of uncertainty with regards to the U.S. election combined with the prospect of additional stimulus measures is probably behind the latest positive inflection in equity markets,” said Sylvain Goyon, strategist at Oddo BHF. That’s because Democratic contender Joe Biden’s “increasing lead in the polls gives credence either to a ‘blue wave’ scenario and more stimulus, or more political pressure for President Trump to offer something prior to the vote,” he added.

Energy shares posted the biggest weekly gain since June, following gains in crude after Hurricane Delta forced operators to shut-in almost 92% of crude output in the Gulf of Mexico.

In stock-specific news, GN Store Nord A/S, Pandora A/S, Zalando SE and Novo Nordisk A/S climbed after raising their guidances for the year. On the deals front, London Stock Exchange Group Plc agreed to sell Borsa Italiana to Euronext NV and two Italian lenders for more than 4.33 billion euros ($5.1 billion).

©2020 Bloomberg L.P.