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European Stocks Rise to Seven-Week High on Bank Boost, Earnings

This content was published on April 28, 2020 - 15:58

(Bloomberg) -- European stocks climbed to a seven-week high, boosted by lenders and gains in heavyweights such as ABB Ltd. and UBS Group AG following earnings reports.

The Stoxx Europe 600 Index added 1.7% at the close of trading, heading for its biggest monthly advance since October 2015 as optimism grew that countries from Spain to France will loosen lockdown restrictions. Banks led gains after they won major policy relief on leverage restrictions, while insurers and energy shares also outperformed.

ABB climbed 5.3% after posting better-than-expected results and saying it doesn’t expect a loss in the second quarter. UBS advanced 7.1% after expressing confidence it can withstand a surge in bad loans.

European shares are rising for a second day, following their worst week in five. The Stoxx 600 has bounced from a mid-March low amid stimulus efforts and hopes of the outbreak slowing, and is testing its 50-day moving average after falling below it in late February. Still, defensive sectors have led the rebound, signaling investor sentiment remains fragile.

“Stock markets have shown signs of resilience lately, despite dire macroeconomic data and mixed newsflow on the pandemic front,” said Olivier Marciot, an investment manager at Unigestion. “The fight between central banks and the impact of containment measures on growth is raging, but investor sentiment remains of the essence. As long as unlimited support persists, downside risks to holding risky assets will prove limited.”

The Stoxx 600 is up 7.1% in April, boosted by health-care shares and carmakers. Oil and gas shares have lagged behind, the only sector left in the red. The benchmark remains 18% lower for the year.

Among other notable corporate movers on Tuesday, Wirecard AG slumped 26% after the payment processing firm said that KPMG’s audit could not obtain all data needed to confirm past revenue.

©2020 Bloomberg L.P.

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