April 9, 2020 / 9:44 AM / 2 months ago

UPDATE 1-European shares gain on hopes pandemic could soon ease

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

* Travel and leisure, insurance, bank stocks lead gains

* Energy stocks jump on hopes of oil production cut

* All eyes on U.S. jobless claims, EU stimulus package

* World’s biggest spirits maker Diageo pulls sales forecast

By Sagarika Jaisinghani

April 9 (Reuters) - European stock markets gained for a fourth straight day on Thursday on hopes the coronavirus pandemic was close to peaking, with investor attention also focused on a meeting of the bloc’s finance ministers to discuss an economic rescue package.

The pan-European STOXX 600 index rose 1.5% and was on course to end a holiday-shortened week more than 5% higher, as data showed France’s coronavirus hospital deaths slowed.

Travel and leisure, insurance and banking stocks, among the worst hit this year from the outbreak, jumped between 2.2% and 4.6%.

The benchmark index has earned back about $1.7 trillion in market value since hitting an eight-year low in March, but still remained nearly 24% below its record high as sweeping lockdown measures crush business activity and spark mass layoffs.

The number of U.S. jobless claims - the most timely data on economic health - likely totalled a staggering 15 million in the last three weeks, and economists expect U.S. job losses of up to 20 million in April.

“Sentiment in markets continues to shift like a yo-yo, but signs the coronavirus curve continues to flatten in the worst affected countries are very positive,” said Stephen Innes, a markets strategist at AxiCorp.

“With a lot of cash on the sidelines - provided the COVID-19 data proves reliable - this move can have legs.”

Global stock markets have also gained ground this week, partly helped by historic fiscal and monetary stimulus to cushion the economic blow of the health crisis.

EU finance ministers are set to resume talks on a half-a-trillion economic support package later in the day, while expectations that the world’s top oil producers would agree to cut output led to a 1.1% rise in energy stocks . The energy index has recouped nearly half of its value following a collapse in oil prices, triggered by a Saudi-Russia price war.

“The worst-case scenario, where OPEC and its previous allies fail to commit to production cuts, would be disastrous for oil-producing economies (and) would see both (oil) benchmarks test a single-digit number,” said Hussein Sayed, a market strategist at FXTM.

With major European firms withdrawing financial forecasts and launching dramatic efforts to save cash, analysts expect an earnings recession to deepen in 2020 with a 15.7% slide in the first quarter and 30.2% in the second.

Diageo Plc, the world’s largest spirits maker, became the latest firm to pull its sales forecast and suspend a capital returns plan in a bid to shore up cash. But its shares gained 2.7% after shedding almost a fifth of their value this year.

Europe’s most valuable tech firm SAP SE rose 1.8% despite cutting its full-year earnings forecast as the pandemic caused customers to put orders on hold.

Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Uttaresh.V, Arun Koyyur and Jon Boyle

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