Global recovery hopes drive European stocks to 1-week high

Sruthi Shankar
·2-min read
The German share price index DAX graph is pictured at the stock exchange in Frankfurt

By Sruthi Shankar

(Reuters) -European stocks hit one-week highs on Friday, with economy-linked sectors such as miners and autos leading the way as investors balanced worries about surging coronavirus cases with the prospect of a strong U.S. economic recovery.

The pan-European STOXX 600 index rose 0.6%, tracking an overnight rally on Wall Street. The benchmark was on course for its fourth straight weekly rise.

Mining, automakers and oil & gas stocks gave the biggest boost to the STOXX 600, while technology sector also rose.

Trading earlier this week was subdued by worries about new lockdowns and a slow pace of vaccination in the euro zone, but optimism about a stimulus-driven recovery in the United States brightened the outlook for global growth.

"It has been notable this week that for all the concerns about a slowdown in Europe and a delay to an economic reopening, any dips in European stocks have been fairly shallow ones," Michael Hewson, chief market analyst at CMC Markets wrote in a note.

"This suggests that for all of the concerns about valuations, in Europe at least the appetite for stocks is still there."

Miners got a boost from higher commodity prices on hopes of a strong global economic recovery, with shares in Rio Tinto, Glencore and BHP Group up between 2.7% and 3.4%. [MET/L]

UK-listed copper miner Kaz Minerals Plc rose 2.9% after it received a final bid worth 4.02 billion pounds ($5.53 billion) from Chairman-led Nova Resources.

Shipping companies A.P. Moller Maersk and Hapag Lloyd rebounded after recent losses in the wake of a massive traffic jam caused by a giant container stuck in the Suez Canal, one of the world's busiest shipping channels.

Maersk rose 4.5%, while Hapag Lloyd gained 6%.

Spain's Banco Santander added 2.8% after saying it will offer to buy the 8.3% stake in its Mexican unit it doesn't already own, strengthening its grip on its Latin American businesses.

Swiss engineering company ABB gained 1.8% after it announced plans to buyback shares worth around $4.3 billion.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)