|Delayed - 01/15 11:50:00 am|
European stocks rack up hefty gains as cyclicals rally
|06/05/2020 | 12:45pm|
By Sruthi Shankar
European stocks racked up their best week in two months on Friday, with investors scooping up battered shares of banks, automakers and travel companies amid growing signs that the pandemic-hit global economy is recovering.
The pan-European STOXX 600 ended the day 2.5% higher, getting an afternoon boost from data that showed U.S. economy unexpectedly added jobs in May after suffering record losses the prior month.
Euro zone blue chip stocks jumped 3.8% and the bloc's lenders <.SX7E> rallied 7.6% for their best weekly gain since 2008's global financial crisis.
Risky assets across the world have been lifted this week as economies continued to emerge from their lockdowns, while a bigger-than-expected stimulus package from the European Central Bank and hopes for European-Union wide fiscal action gave a further boost to the continent's markets.
Growth-sensitive cyclical sectors that have suffered badly during the coronavirus crisis, such as oil & gas, automakers and travel & leisure, were up between 4.9% and 5.8%.
The auto-heavy Germany DAX is just 6.7% away from hitting an all-time high.
"It only takes a small change in sentiment toward these stocks - a glimmer of optimism that the virus is under control or ever increasing stimulus - and investors will question whether the reversal has begun," said Lewis Grant, a senior portfolio manager at Federated Hermes.
"These rallies can become self-sustaining as more investors rush in through fear of missing out," he added.
Analysts at Bank of America on Friday forecast European stocks would rise another 10% by the end of September on expectation of a pick-up in business activity.
(Graphic: European stocks recover nearly 2/3rd of virus-led losses, )
German fashion house Hugo Boss was up 11.4% after it confirmed ongoing talks for a new chief executive officer with Daniel Grieder, former head of Tommy Hilfiger Global & PVH Europe.
(Reporting by Sruthi Shankar and Aaron Saldanha in Bengaluru; Editing by Arun Koyyur, Kirsten Donovan)