BRUSSELS, June 5 ― European shares resumed their rally on Friday as a bumper stimulus from the European Central Bank fuelled hopes of a faster economic recovery, putting the main benchmarks on course for their best week in two months.
The pan-European STOXX 600 gained 1.3 per cent, led by a 3.3 per cent jump in bank stocks, while insurers, automakers and travel stocks gained nearly 3 per cent.
Global equity markets have climbed strongly this week, with Wall Street indexes nearing record levels as investors focussed on re-opening of economies, progress in development of a Covid-19 vaccine and stimulus actions.
Europe’s STOXX 600 is about 15 per cent below all-time highs, but has recovered more than 37 per cent from its March lows, with investors moving into more economically sensitive cyclical sectors.
The benchmark index is on course to post a 5.9 per cent gain this week, its best showing since April 10.
The euro zone banks index climbed 4.1%, led by Spanish banks, benefiting from gains on their sovereign bond holdings. Investors have warmed up to peripheral euro zone debt this week after Thursday’s bigger-than-expected expansion of ECB’s pandemic-linked stimulus package.
Shares in Banco de Sabadell jumped 7.9 per cent, while France’s Societe Generale and Germany’s Commerzbank gained 7 per cent and 6.4 per cent.
“Much pessimism remains priced into eurozone financial assets but the ECB continues to provide a material level of support,” said Raymond James’ European strategist Chris Bailey. “Signs of recent eurozone government coordination efforts can only help positively augment this.”
British Airways owner-IAG topped gains on the STOXX 600 with a 11 per cent jump, while shares in easyJet, Lufthansa and Air France gained between 3 per cent and 6.2 per cent.
Airbus gained 6.6 per cent after Australia’s Qantas announced plans to reactivate plans to order airplanes.
German fashion house Hugo Boss jumped 6.9 per cent after it confirmed ongoing talks for a new chief executive officer with Daniel Grieder, former head of Tommy Hilfiger Global & PVH Europe.
German property group Deutsche Wohnen gained 2.3 per cent after a report of its entry into the blue-chip DAX index to replace Lufthansa. ― Reuters
