LONDON, Oct 5 — European stocks gained today, lifted by dealmaking activity and an upbeat global mood following positive updates of US President Donald Trump’s health.
The pan-European STOXX 600 index was up 0.6 per cent, adding to last week’s near-two per cent gain. Sectors considered more economically sensitive such as oil and gas, travel and leisure, banks, and automakers climbed.
That was despite a 27.3 per cent plunge in Cineworld after the world’s second-biggest cinema chain said it would close all of its UK and US movie theatres later this week, leaving as many as 45,000 workers unemployed.
Oil majors Royal Dutch Shell, BP and Total rose nearly two per cent, with crude prices climbing after an easing of the worst fears about Trump’s health condition and an expanding workers’ strike in Norway, Western Europe’s largest oil producer.
Trump’s doctors treating him for Covid-19 have said his health is improving and he could be sent back to the White House as soon as today, although outside experts warn that his case may be severe.
“If he is recovering relatively well, that means stability because if it turns out that Trump gets ill and might not be able to run any campaign, that creates a lot of questions,” said Teeuwe Mevissen, a senior macro strategist at Rabobank.
“But there are many other uncertainties hanging above markets,” Mevissen said, pointing to a second wave of Covid-19 cases in Europe, Brexit risks and US-China trade tensions.
A survey showed the euro zone’s economic recovery faltered in September as the reimposition of some coronavirus curbs sent the bloc’s dominant service sector into reverse.
IHS Markit’s final composite Purchasing Managers’ Index fell to 50.4 in September from August’s 51.9, close to the 50-mark separating growth from contraction.
Madrid-listed stocks outperformed with a gain of 1.1 per cent on reports of consolidation in the banking sector.
Unicaja jumped 10.7 per cent after it confirmed reports that it was in preliminary talks for a potential merger with its peer Liberbank, which surged 15 per cent.
Sabadell rose 3.5 per cent after a local newspaper reported that it had held contacts with rivals BBVA and Kutxabank to evaluate a potential merger.
Meanwhile, Dufry surged 17.7 per cent after it revealed that China’s Alibaba planned to acquire a stake of up to 9.99 per cent in the Swiss duty-free group.
UK’s Weir Group Plc rose 15.5 per cent to the top of STOXX 600 after it agreed to sell its oil and gas division to US heavy equipment maker Caterpillar for US$405 million (RM1.7 billion). — Reuters
