The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, August 6, 2020. REUTERS/Staff
August 11, 2020
By Sruthi Shankar
(Reuters) – European stocks hit a near three-week high on Tuesday as automakers gained on a surge in China sales numbers, with hopes of a steady economic recovery from the coronavirus crisis boosting global sentiment.
The pan-European STOXX 600 index <.STOXX> rose 1.6%, led again by a rally in sectors more exposed to economic swings like travel and leisure <.SXTP>, miners <.SXPP> and energy firms <.SXEP>.
Automakers <.SXAP> surged 3.1% after data showed China’s auto sales climbed 16.4% in July, the fourth straight month of gains as the world’s biggest vehicle market comes off lows hit during coronavirus lockdown.
Improving economic data in Europe, hopes of more stimulus and a vaccine for the COVID-19 have put the STOXX 600 on course for strong gains in August despite souring U.S.-China relations and uncertainty over the 2020 U.S. presidential election.
“There has been a decent tick-up in economic growth momentum, and earnings for some of the cyclical sectors have come in better than expected,” said Paul Danis, chief global strategist at wealth manager Brewin Dolphin.
“There is a good reason to believe that some of the beaten-down value names could pick up. But it does make sense to have bias for the mega-cap growth names.”
Positive earnings also added to the mood, with German online fashion retailer Zalando SE <ZALG.DE> rising 3.4% after reporting a more than doubling of sales on its site.
Meal-kit delivery firm HelloFresh <HFGG.DE>, whose shares have more than doubled in value this year, rose 2.8% after it raised its full-year guidance.
Investors globally took heart from signs that the latest U.S.-China sparring appears not to have spilled over into their trade deal and continued to expect additional U.S. fiscal stimulus.[MKTS/GLOB]
UK’s FTSE 100 <.FTSE> climbed 1.8% even as data showed the number of people in work in Britain fell by 220,000 in the three months to June, the most since 2009. [.L]
Holiday Inn-owner InterContinental Hotels <IHG.L> gained 3.5% as it saw some “very early” signs of a recovery in demand, but its profit slumped 82% in the first half of 2020.
Domino’s Pizza Group <DOM.L> slipped 1.9% as a fall in overall orders and the additional costs of cooking and delivering its pizzas safely hurt its first-half operating earnings.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)
