European stock markets on Thursday gained for a fourth straight day, with sentiment propped up by the latest round of stimulus from the US Federal Reserve and on hopes that the COVID-19 pandemic was close to peaking.
The pan-European STOXX 600 on Thursday closed up 5.13 points, or 1.6 percent, to 331.80, ending a holiday-shortened week 7.4 percent higher — its best week since 2011.
The FTSE 100 on Thursday led the charge among European majors, rising 220.68 points, or 3.9 percent, to close at 5,842.71, a 7.9 percent jump from 5,415.50 on April 3.
Sentiment was buoyed by data showing that France’s coronavirus hospital deaths slowed and Spain’s new cases eased, but the main lift of the session came as Wall Street indices jumped after the Fed rolled out a US$2.3 trillion program to bolster local governments and businesses.
That overshadowed data showing another week with more than 6 million new US jobless claims.
“The Fed will buy riskier debt and that should keep this V-shaped rebound going a little longer,” Oanda Corp senior market analyst Edward Moya said in New York. “The Fed has shown the markets they are doing whatever it takes for the economy.”
All eyes were on the fate of a multibillion-euro program that EU finance ministers had been struggling to agree on this week.
All major European sectors rose, with the travel and leisure sector — affected the worst by the pandemic — leading gains for yet another day. The sector added 24.5 percent this week, helping reduce yearly losses to 36 percent.
Cineworld Group PLC topped the pan-region index, soaring 27 percent. Shares of the cinema chain have been rising since it announced cost cuts earlier this week.
The STOXX 600 has earned back about US$1.7 trillion in market value since hitting an eight-year low last month, but remains nearly 23 percent below its record high.
The French government more than doubled the expected cost of its crisis response measures, pushing the budget deficit and national debt to record levels.
Paris’ CAC 40 on Thursday rose 64.10 points, or 1.4 percent, to 4,506.85, jumping 8.5 percent from a close of 4,154.58 on April 3.
With major European firms withdrawing financial forecasts and making dramatic efforts to save cash, analysts expect an earnings recession to deepen this year with a 15.7 percent slide in the first quarter and 30.2 percent in the second.
Diageo PLC, the world’s largest spirits maker, became the latest firm to pull its sales forecast and suspend a capital return plan in a bid to shore up cash.
However, its shares gained 4.4 percent after shedding almost one-fifth of their value this year.
Europe’s most valuable tech firm, SAP SE, rose 4.8 percent, despite cutting its full-year earnings forecast as the pandemic caused customers to put orders on hold.
Additional reporting by staff writer
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