European shares near 11-week high\, UK stocks surge

Stocks

European shares near 11-week high, UK stocks surge

Reuters May 26 | Updated on May 26, 2020 Published on May 26, 2020

The pan-European STOXX 600 rose 1.2 per cent, trading just below its March 10 high. File Photo   -  Bloomberg

European shares hovered near a 11-week high on Tuesday, with UK markets surging after a long weekend, as businesses worldwide gradually reopened following a months-long lockdown.

The pan-European STOXX 600 rose 1.2 per cent, trading just below its March 10 high.

Returning from a bank holiday, UK's FTSE 100 surged 1.9 per cent as Prime Minister Boris Johnson said on Monday Britain will reopen thousands of high street shops, department stores and shopping centres next month.

Aston Martin soared 40.7 per cent after the UK luxury carmaker confirmed that Tobias Moers, CEO of Mercedes-AMG, would become its chief executive officer.

Europe's travel & leisure stocks jumped 5.8 per cent after a report said the German government wants to end a travel warning for tourist trips to 31 European countries from June 15 if the coronavirus situation allows.

British Airways owner IAG jumped 16.4 per cent, low-cost carrier easyJet Plc and cruise liner Carnival Plc gained about 12 per cent.

Germany's Lufthansa extended gains after the government threw a 9 billion euro lifeline.

“Any news on reopening of the economy and lack of stories about a second wave are going to be seen as a positive for markets,” said Marija Veitmane, senior multi-asset strategist at State Street Global Markets.

“What is interesting is that analysts are increasingly expecting Q2 to be the trough. But I would caution by saying that markets are still very, very fragile.”

The STOXX 600 has climbed nearly 30 per cent from its mid-March lows, as hopes of further policy support and improving economic data fuelled hopes of a faster economic recovery from the coronavirus pandemic.

All eyes will be on the European Commission's release of its recovery plan on Wednesday to gauge the progress of a Franco-German proposal for a 500 billion euro grants-based coronavirus recovery fund.

Paris-headquartered shopping centre operator Klepierre SA jumped 9.4 per cent after saying it had reopened 80 per cent of its European malls and hopes to reopen 90 per cent of them within 10 days.

French carmakers Renault SA and Peugeot SA jumped 6 per cent and 3 per cent respectively as President Emmanuel Macron said support for the hard-hit car sector will be “massively amplified”.

Sources told Reuters that Renault and Nissan Motor Co Ltd have shelved plans to push towards the full merger and will instead fix their troubled alliance.

German payments firm Wirecard AG fell 1.6 per cent after it postponed the publication of final 2019 results for a third time, citing delays in finalising audit procedures.

Published on May 26, 2020

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