Europe: Stocks near three-week high as US stimulus talks lift global mood

[BENGALURU] European stocks hit a near three-week high on Thursday as investors globally pinned hopes on more US stimulus even as coronavirus cases surged across the continent.

The pan-European Stoxx 600 index closed 0.8 per cent higher after making hesitant gains in morning trading.

The German DAX jumped 0.9 per cent, also hitting its highest since mid-September, while France's CAC 40 rose 0.6 per cent and London's FTSE 100 gained 0.5 per cent.

Helping Europe rally into the close, Wall Street indexes jumped as US President Donald Trump signalled progress in negotiations around new fiscal stimulus days after calling off talks on a more comprehensive deal.

However, US House Speaker Nancy Pelosi said there would be no additional federal aid for US airlines without a bigger relief package.

"It's a sentiment driver for the market at the moment," said Roger Jones, head of equities at London and Capital. "The market has become very fiscally orientated, yet the numbers provided can only provide a short-term boost."

Beaten-down sectors such as banks, oil & gas and travel & leisure were among the top gainers. But tech and pharma also offered support.

UK oil majors Royal Dutch Shell and BP gained over 2 per cent with crude prices climbing above US$43 a barrel on signs of supply shortages.

Airline stocks also jumped, with British Airways owner IAG and Lufthansa up 10.3 per cent and 6.1 per cent respectively.

The gains came even as Covid-19 cases surged across Europe, with more than 17,540 new daily cases recorded in the United Kingdom, while hospitals in the Paris region moved into emergency mode.

An upgrade by Goldman Sachs to "buy" helped German television network ProSieben jump 3.7 per cent, while French ad firm Publicis rose 2.0 per cent after analysts said they expect it to outperform global peers in the third quarter.

3.9 Spain's Telefonica gained nearly 3 per cent after Reuters reported that it was in the final stages of negotiating a roughly 5 billion euros (S$8 billion) deal to build a fibre-optic network in Germany.

REUTERS