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Europe near three-week high as auto, travel shares surge

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imageStock Markets1 hour ago (Aug 11, 2020 04:50AM ET)

(C) Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt

By Sruthi Shankar

(Reuters) – European stocks hit a near three-week high on Tuesday as automakers gained on a surge in China sales numbers, with hopes of a steady economic recovery from the coronavirus crisis boosting global sentiment.

The pan-European STOXX 600 index (STOXX) rose 1.6%, led again by a rally in sectors more exposed to economic swings like travel and leisure (SXTP), miners (SXPP) and energy firms (SXEP).

Automakers (SXAP) surged 3.1% after data showed China’s auto sales climbed 16.4% in July, the fourth straight month of gains as the world’s biggest vehicle market comes off lows hit during coronavirus lockdown.

Improving economic data in Europe, hopes of more stimulus and a vaccine for the COVID-19 have put the STOXX 600 on course for strong gains in August despite souring U.S.-China relations and uncertainty over the 2020 U.S. presidential election.

“There has been a decent tick-up in economic growth momentum, and earnings for some of the cyclical sectors have come in better than expected,” said Paul Danis, chief global strategist at wealth manager Brewin Dolphin (OTC:BDNHF).

“There is a good reason to believe that some of the beaten-down value names could pick up. But it does make sense to have bias for the mega-cap growth names.”

Positive earnings also added to the mood, with German online fashion retailer Zalando SE (DE:ZALG) rising 3.4% after reporting a more than doubling of sales on its site.

Meal-kit delivery firm HelloFresh (DE:HFGG), whose shares have more than doubled in value this year, rose 2.8% after it raised its full-year guidance.

Investors globally took heart from signs that the latest U.S.-China sparring appears not to have spilled over into their trade deal and continued to expect additional U.S. fiscal stimulus.[MKTS/GLOB]

UK’s FTSE 100 (FTSE) climbed 1.8% even as data showed the number of people in work in Britain fell by 220,000 in the three months to June, the most since 2009. (L)

Holiday Inn-owner InterContinental Hotels (L:IHG) gained 3.5% as it saw some “very early” signs of a recovery in demand, but its profit slumped 82% in the first half of 2020.

Domino’s Pizza Group (L:DOM) slipped 1.9% as a fall in overall orders and the additional costs of cooking and delivering its pizzas safely hurt its first-half operating earnings.

Europe near three-week high as auto, travel shares surge

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