|Delayed - 01/20 11:50:00 am|
European stocks hit one-week high as investors await U.S. election outcome
|11/03/2020 | 12:27pm|
(Reuters) - Banking and auto stocks propelled the European stocks benchmark to a one-week high on Tuesday, while investors anticipated a clear win for Democrat Joe Biden in the U.S. presidential election would lead to more economic stimulus.
The pan-European STOXX 600 closed 2.3% higher - its best day since mid-June. Bourses in Frankfurt, Paris and London saw similar gains.
Stock markets worldwide found strength in signs that Biden held a strong and consistent lead in national opinion polls over Republican President Donald Trump, although the race is tighter in several swing states.
A Biden win is widely considered to be supportive for European equities in the near-term because of expectations it would mean a bigger stimulus package and better trade ties with the United States.
Banks <.SX7P> led gains among European sectors, with French lender BNP Paribas jumping 6.1% as a surge in currency and commodity trading helped it beat quarterly profit estimates.
Automobiles & parts sector, which has borne the brunt of the Trump administration's trade war with China, gained 3.5%.
Boosting the index, luxury automaker Ferrari surged 7.1% after it forecast 2020 earnings at the top of its previous guidance range as new models such as the hybrid SF90 Stradale start to reach customers.
Insurers, financial services companies and construction & materials were the other top gainers.
"Even though last minute surprises from the U.S. vote can't be ruled out, I believe European equities are close to a very interesting turnaround point which could mean a more 'structural' return of investor interest towards the region," said Michele Pedroni, portfolio manager at Decalia Asset Management in Geneva.
"Any reversal, however, could be jeopardised should the crisis triggered by the coronavirus pandemic drag on for too long, given that Europe has limited political and economic manoeuvre space to progressively provide support to its economy," he added.
The STOXX 600 shed almost 6% last week as soaring coronavirus cases pushed major economies including France, Germany and the United Kingdom back into partial lockdown, leading economists to cut fourth-quarter economic growth expectations.
Among other individual movers, British homebuilder Crest Nicholson surged 16.5% after it reinstated its dividend and said annual earnings would top market expectations.
German meal-kit delivery company HelloFresh, which has more than doubled in value this year as lockdowns drove demand, slipped 1.2% after quarterly results.
(Reporting by Sruthi Shankar in Bengaluru and Danilo Masoni in Milan; editing by Uttaresh.V, Shailesh Kuber and Barbara Lewis)
By Sruthi Shankar