FRANKFURT, June 26 ― European stocks closed higher yesterday, as improving economic data and more support from the European Central Bank helped lift sentiment, while shares in Germany's Lufthansa jumped after a top shareholder backed a government bailout.
The pan-European STOXX 600 closed up 0.7 per cent after a choppy session with automakers, financial services , banks and insurers the top gainers, rising between 1.6 per cent and 2.4 per cent.
Stocks picked up steam after the ECB said it would offer euro loans against collateral to central banks outside the euro area to backstop funding markets amid the coronavirus pandemic.
“The ECB took a fresh initiative today that caught the market by surprise and is helping lift financial shares today,” said Marc Chandler at Bannockburn Global Forex.
Lufthansa jumped 7.1 per cent after billionaire investor Heinz Hermann Thiele dropped his objections to a €9 billion (RM43.2 billion) government bailout of the airline.
Meanwhile, in a first for a constituent of Germany's prestigious DAX, payments firm Wirecard collapsed owing creditors almost US$4 billion after disclosing a gaping hole in its books. Its shares slumped 71.3 per cent.
The auto-heavy German index gained 0.7 per cent overall, boosted by Daimler, Volkswagen and BMW.
After upbeat euro zone business activity readings for June earlier this week, a gauge of German consumer morale improved heading into July, raising hopes for an steady recovery from the coronavirus crisis.
However, surging Covid-19 cases in the United States, prospects of a fresh EU-US trade tussle and a worrying forecast for global economy put the STOXX 600 on track for weekly losses.
Budget airline easyJet was down 9.5 per cent after raising about £419 million through a share placement to help bolster its finances.
Sanofi edged up 0.9 per cent after Reuters reported the drugmaker is considering cutting hundreds of jobs.
Bayer AG ended down 2.9 per cent, reversing earlier gains, after agreeing to pay as much as US$10.9 billion to settle US lawsuits claiming that its widely used weedkiller Roundup caused cancer. ― Reuters
