STOXX 600 is on the hunt for bargains
European stocks jumped more than 1% on Friday, posting their best session in two months and erasing all losses this week, as investors scoured for bargains after one of the worst sellers this year on concerns over global economic recovery.
The pan-European STOXX 600 gained 1.3%, sectors that were hit earlier this week, such as automakers and miners, rose 4% and 3.4% respectively. The mining sector marked its best session in two months.
French stocks rose the most in four months, advancing 2.1% and marking gains among major European exchanges.
Banks rose 2.4%, but were hit the hardest this week as government bond yields fell.
A further rise in COVID-19 cases and disappointing economic data in the US and China have raised concerns about the strength of the recovery, raising bonds and lowering the benchmark STOXX 600 to 1.1 % the week until Friday’s gains offset those losses.
However, with France saying the highly contagious Delta variant of SARS-CoV-2 will likely account for most new COVID-19 cases in the country from this weekend, and Spanish tourism hotspots asking the government to re-establishing curfews, the way out of an economic crisis induced by a pandemic still seems difficult.
âThis kind of angst is not new to the markets. However, falling yields tell us that the recovery is either struggling or simply being delayed, âCMC Markets’ Michael Hewson said in a note. âMuch will likely depend on vaccine deployment plans and how quickly it can be rolled out in countries where cases are rising sharply. “
IAG, owner of British Airways, EasyJet PLC and Ryanair Holdings PLC rose 0.5 to 1.9% as the UK planned to end the quarantine for fully vaccinated arrivals from other countries in the weeks to come.
Previously released data showed that the UK’s post-lockdown economic rebound slowed sharply in May, despite an easing of COVID-19 restrictions.
French aircraft manufacturer Airbus SA gained 3.4% after announcing a 52% increase in deliveries in the first half of the year.
British luxury goods group Burberry Group PLC rose 3.8% after Goldman Sachs Group Inc raised the stock to “buy”, while Italian rival Salvatore Ferragamo SpA slipped 0.7% after the American bank downgraded it to “sell”.
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