Europe: US election bets, earnings drive stocks to two-week high

[BENGALURU] European stocks hit a more than two-week high on Thursday, as strong quarterly earnings, fresh stimulus for Britain's coronavirus-hit economy and a post-election gains for Wall Street lifted investor spirits.

The pan-European Stoxx 600 index gained 1.1 per cent to touch its highest level since Oct 19 and was on track for its best weekly showing in more than six months.

Technology stocks jumped 2.5 per cent as did their US peers, but gains were broad-based in Europe with media, automakers and chemical companies surging over 2 per cent.

While the outcome of the US presidential election is still unclear, Democratic challenger Joe Biden was edging closer to victory over Republican President Donald Trump, who has alleged voting fraud, filed lawsuits and called for at least one state recount.

Investors were counting on Republicans to maintain control of the US Senate, which dims prospects for a large new stimulus package but makes it harder to enact tighter regulation or raise corporate taxes on American firms.

"From a market perspective, the uncertainty we are seeing does little to hurt sentiment, with the prospect of a split Congress limiting the possibility of higher taxes under Biden," Joshua Mahony, senior market analyst at IG said in a note.

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A handful of upbeat corporate results also lifted European markets, with Munich-based broadcaster ProSiebenSat.1 Media jumping 8.9 per cent after it returned to profit in the third quarter and reinstated its outlook for the full year.

French lender Societe Generale gained 3.7 per cent after a recovery in its equity trading business helped it swing back to a quarterly profit.

British insurer RSA soared 45.7 per cent as it said England's second national lockdown is unlikely to have much impact on its business.

Wind turbine maker Siemens Gamesa, which would benefit from Biden's clean energy push, rose 5.1 per cent after it confirmed forecasts for a steady rise in margins until 2023.

Its shares, along with those of rival Vestas, took a hit on Wednesday amid uncertainty over the US election outcome.

Markets also took heart from new economic stimulus to cushion the impact of the coronavirus crisis, with the UK's FTSE up 0.4 per cent after the Bank of England increased its already huge bond-buying stimulus and Finance Minister Rishi Sunak extended his costly coronavirus furlough scheme Banks came under pressure, with Dutch bank ING Groep NV falling 4.8 per cent after reporting lower-than-expected pre-tax profit.

Germany's Commerzbank dropped 5.8 per cent after it reported a quarterly loss.

REUTERS