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Europe: Travel firms propel stocks to strongest close in 11 weeks
[BENGALURU] European shares closed at an 11-week high on Tuesday, with travel and leisure stocks soaring on hopes of a revival in tourism as countries gradually reopened after a months-long lockdown.
The pan-European Stoxx 600 rose 1.1 per cent to hit its highest closing level since March 9.
Europe's battered travel sector jumped 6.9 per cent following reports Spain and Germany would ease travel restrictions, while no noticeable increase in infections were reported after the easing of lockdowns.
British Airways owner IAG jumped 22.5 per cent, low-cost carrier easyJet Plc gained 19 per cent and UK-listed shares of travel group TUI soared 52 per cent.
Germany's Lufthansa extended gains after the government threw the airline a 9 billion euro (S$14 billion) lifeline on Monday.
UK's FTSE 100 returned from a holiday to rise 1.2 per cent as Prime Minister Boris Johnson said Britain will reopen thousands of high street shops, department stores and shopping centres next month.
Other hard-hit sectors such as eurozone banks surged 6.5 per cent, bouncing off record low levels, while insurers and automakers gained about 3 per cent each.
"We believe that the pro-cyclical market bias that we called for will have some legs, and build on itself in the next weeks," JPMorgan Cazenove analysts told clients.
"It should last while PMIs are normalising. The upmove in Eurozone PMI that we saw last week is likely to extend in the next reading, for June."
The Stoxx 600 has climbed 30 per cent from its mid-March lows, as hopes of further policy support and improving economic data fuelled hopes of a faster economic recovery from the novel coronavirus pandemic.
All eyes will be on the European Commission's release of its recovery plan on Wednesday to gauge the progress of a Franco-German proposal for a 500 billion euro grants-based coronavirus recovery fund.
Paris-headquartered shopping centre operator Klepierre SA jumped 12.6 per cent after saying it had reopened 80 per cent of its European malls and hopes to reopen 90 per cent of them within 10 days.
French carmakers Renault SA and Peugeot SA jumped 6.6 per cent and 5.8 per cent respectively.
French President Emmanuel Macron said that measures announced to help the country's car industry were worth more than 8 billion euros (S$12.5 billion) in total.
Mr Macron said autonomous and electric vehicles will form a key part of the sector after the coronavirus crisis.
Sanofi fell 1.3 per cent, in line with broader healthcare losses, despite the French drugmaker's impending US$13 billion payday from selling most of its 20.6 per cent stake in US partner Regeneron.