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Europe: Stocks rise for first time in four days in broad rebound
[LONDON] European stocks rose, snapping their longest losing streak in three weeks.
The Stoxx Europe 600 Index added 1.1 per cent at the close of trading, as all industry groups advanced. Travel and leisure shares and financial firms, among shares that suffered the worst declines in the aftermath of Brexit, were the best performers, while banks rebounded from their lowest levels since 2011.
After a 4.1 per cent slide in Europe shares in the past three days, optimism prevailed that central banks will remain supportive of markets after minutes from the Federal Reserve's last meeting showed officials are losing confidence in the need to tighten policy any time soon.
Before that, renewed concerns about Italian banks and economic growth added to worries about the fallout from Britain's vote to leave the European Union.
"The market can sway so violently either way these days," said Teis Knuthsen, chief investment officer at Saxo Bank A/S's private-banking unit in Hellerup, Denmark.
"You need to base the rally on something. What we need the most from policy makers is some sort of signal that we can handle European banks and that we will begin to address the UK situation. I'm more positive about the second half of the year, but I'm also hedging my bets. Like everyone else, I'm also buying gold."
A gauge of insurers rebounded 1.1 per cent, after sliding to its lowest level since 2013. A slew of UK property funds froze withdrawals this week as investors sought to dump real estate holdings after Brexit.
The UK's FTSE 100 Index advanced for the sixth time in eight days, up 1.1 per cent. A plunge in the pound since the referendum has lifted the shares of its exporters, and analysts' profit estimates for the gauge's firms have seen the sharpest upgrade in more than a decade. Associated British Foods Plc jumped 8.9 per cent after improving its profit forecast for the year, saying the lower pound will boost the value of profits earned outside its home market.
Some shares moved on deal activity. Danone climbed 1.9 per cent after agreeing to pay about US$10 billion for WhiteWave Foods Co, a US maker of soy milk and plant-based foods.
Rentokil Initial Plc rose 3.4 per cent after buying North American pest-control distribution business Residex LLC for US$30 million and saying it won a two-year contract with the US government to combat the Zika virus.
Deutsche Bank AG bucked the trend, extending a record low after saying the UK's vote to leave the EU will probably curtail finance industry revenue, including in investment banking. Linde AG dropped 1.1 per cent after its US health-care subsidiary Lincare was accused of submitting fraudulent bills to the country's Medicare insurance program.
Randgold Resources Ltd declined 4.5 per cent from its all-time high, while Fresnillo Plc fell 4.6 per cent from its highest peak since 2011. The precious-metal producers are among this year's best Stoxx 600 performers.