European stocks finished higher on Friday, with the benchmark STOXX 600 registering its third straight week of gains, as a rise in commodity-linked stocks helped counter concerns over rising coronavirus cases and the deadlock facing a new American recovery.
The DAX chart of the German Stock Price Index is presented on the Stock Exchange in Frankfurt, Germany on November 18, 2020. REUTERS / Staff
The pan-European STOXX 600 .STOXX index gained 0.5%.
Miners, including Rio Tinto RIO.L, Glencore GLEN.L and BHP BHPB.L, rose 1.2% to 2.4% as metal prices rebounded due to continued strong demand in major consumers Chinese and potential supply disruptions. [MET/L]
The .SXEP oil and gas sector also jumped 1.5% as crude prices were supported by successful COVID-19 vaccine trials. [O/R]
“European markets are gradually gaining ground as vaccine hopes are thwarted by fears of a US stimulus and foreclosure,” said Joshua Mahony, senior market analyst at IG.
Data from Bank of America showed investors pumped $ 27 billion into equity funds last week as positive COVID-19 vaccine updates led to euphoric buying of stocks in sectors the most affected such as banking, travel and leisure, and oil.
These sectors were among the top performers this week, with investors betting that a vaccine will jumpstart economic growth faster, but worries about coronavirus closings have shone a rally of these so-called value stocks.
Markets were also worried about further stimulus to the U.S. economy after Treasury Secretary Steven Mnuchin said the Federal Reserve’s major pandemic loan programs would expire on December 31, putting the administration Outgoing Trump at odds with the central bank.
The UK’s FTSE 100 .FTSE rose 0.3% as retail sales rebounded in October and the UK Minister for Health said there were encouraging signs that cases of the virus were starting to s ‘flatten.
There was optimism on the Brexit front, with an EU official pointing to progress on “important issues” as Britain negotiates a future trade relationship with the European Union.
Italy’s BPER Banca EMII.MI rose 4.1% after its main investor broached the idea of a merger with rival Banco BPM BAMI.MI, which gained 3.7%.
German fashion retailer Zalando ZALG.DE rose 1.1% after its CFO forecasted accelerated growth next year.
UK software company Sage SGE.L plunged 13.4% after reporting a 3.7% drop in full-year organic operating income.
Source: Reuters (Reporting by Shashank Nayar and Sruthi Shankar in Bengaluru; edited by Anil D’Silva and Jane Merriman)