Europe Stocks Rise on U.S. Tax-Cut Bets as Lockdown Winners Gain

European stocks rose, hitting their highest level since July 23, with risk assets getting a boost after U.S. President Donald Trump said he’s considering a tax cut on capital gains.

The Stoxx Europe 600 Index added 1.7% by the close in London, led by travel and automaker stocks after Chinese car sales accelerated. In the past three trading sessions, the benchmark advanced 2.3%.

Lockdown winners rose on corporate updates: online fashion retailer Zalando SE climbed 1.9% to a record high after its second-quarter profit doubled from a year earlier, while Vestas Wind Systems A/S, the world’s biggest wind-turbine maker, jumped 9.5% after reintroducing its full-year revenue guidance.

Equities are regaining momentum after stalling since reaching a four-month high in late July, assailed by geopolitical tensions and worries about rising coronavirus cases globally. Still, surprisingly strong macro reports in July signal room for further stock gains, while investors await progress on a U.S. stimulus plan.

Europe Stocks Rise on U.S. Tax-Cut Bets as Lockdown Winners Gain

The possibility of more tax cuts has “lifted sentiment, resulting in substantial gains for European markets and a rise for U.S. futures,” according to Chris Beauchamp, chief market analyst at IG. “With earnings season now mostly done and dusted, the focus shifts back to the prospect of more U.S. stimulus and the geopolitical picture,” he said.

Among other notable movers, gambling group GVC Holdings Plc surged 9.6% following the purchase of a $1 billion stake in joint-venture partner MGM by U.S. billionaire Barry Diller’s InterActiveCorp.

©2020 Bloomberg L.P.

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