(Reuters) - European shares clocked their biggest one-day gain in nearly four months on Tuesday as upbeat earnings updates from BP (BP.L) and Glencore (GLEN.L) along with China’s moves to support its markets lifted sentiment.
China’s central bank injected 1.7 trillion yuan ($243 billion) on Monday and Tuesday to stabilize markets that fell heavily on heightened fears over the potential economic fallout from the fast-spreading coronavirus.
In line with a pick up in global stocks, the pan-European STOXX 600 index finished up 1.6%, building on Monday’s gains after virus fears knocked 3% off the index last week.
“It’s just the stimulus out of China adding to confidence today,” said Willie Delwiche, investment strategist at Baird.
“Investors are maybe a little less concerned about virus fears out of China and more that China is doing what it needs to provide liquidity and kind of contain the economic impact.”
But with more than 400 deaths and several travel bans on China, headlines about the coronavirus outbreak are expected to sway markets in the near term.
Broad-based gains in Europe were led by a 3.5% jump in the basic resources sector .SXPP. Packed with mining companies focused on China, the sector broke a three-day losing run as Glencore rallied 5.2% after it maintained 2020 output targets.
Oil company BP (BP.L) was the biggest boost to STOXX 600 after it raised its dividend and reported better-than-expected fourth-quarter profit.
Along with a rebound in oil prices the oil and gas sector .SXEP, which has also been sold off heavily over the past week, posted its best day in nearly five months.
Topping the pan-regional index was Danish medical equipment manufacturer Ambu (AMBUb.CO) which soared 24% after reporting better-than-expected quarterly revenue.
But a clutch of poor earnings kept a lid on gains.
Micro Focus International (MCRO.L) tumbled 22%. The British IT company said Chairman Kevin Loosemore will step down this month after full-year results fell short of expectations.
Italian carmaker Ferrari (RACE.MI) slipped 2.3% despite meeting profit targets as it provided only a cautious upgrade to its outlook for 2020.
Also languishing at the bottom of the STOXX 600 index was Swiss inspections group SGS (SGSN.S), logging its worst day in more than 3-1/2 years after the company’s second-biggest investor, the von Finck family, cut its stake.
Additional reporting by Sruthi Shankar and Ambar Warrick in Bengaluru; Editing by Subhranshu Sahu, Shounak Dasgupta and David Clarke