European stocks closed in positive territory for a third day as investors ditched the winners of the market rebound to boost shares that had lagged behind.
The Stoxx Europe 600 Index rose 0.2%, closing at its highest level since March 6. Cyclicals including banks and carmakers led gains, while health-care and tech shares declined.
Optimism is growing about a path out of lockdowns as the region’s governments continued to ease virus-related restrictions without experiencing a resurgence in cases, while prospects of a 750 billion-euro ($823 billion) fiscal stimulus package from the European Union also boosted sentiment.
European equities have now recovered about half the losses spurred by the initial reaction to the coronavirus outbreak in February-March. The Stoxx 600 is on track for its best May performance in a decade, up 2.9%.
“Market attention is focusing on the restarting and the signposts we can get out of China on how that might play out elsewhere,” Jean Boivin, head of BlackRock Investment Institute, said on Bloomberg TV. “That’s the driver at this stage and it’s a pretty strong driver. We’ve seen continuing support to risk assets throughout May.”
China’s economy in May is inching out of the slump triggered by the pandemic, early indicators showed this week.
Shares in peripheral Europe climbed after news of the EU stimulus package, with Greece leading gains, up 3.9%, after also getting a double upgrade from Morgan Stanley.
Among notable movers, Finnish tire maker Nokian Renkaat Oyj jumped 15% after appointing a new CEO.
©2020 Bloomberg L.P.
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