European stocks on Friday racked up their best week in two months, with investors scooping up battered shares of banks, automakers and travel companies amid growing signs that the pandemic-hit global economy is recovering.
The pan-European STOXX 600 ended the day 2.48 percent higher at 375.32, getting an afternoon boost from data that showed that the US economy had unexpectedly added jobs last month after suffering record losses in April.
It closed 7.12 percent higher than a week earlier.
Eurozone blue-chip stocks jumped 3.8 percent and the bloc’s lenders rallied 7.6 percent for their best weekly gain since 2008’s global financial crisis.
Risky assets across the world have been lifted this week as economies continued to emerge from their lockdowns, while a bigger-than-expected stimulus package from the European Central Bank and hopes for EU wide fiscal action gave a further boost to the continent’s markets.
Growth-sensitive cyclical sectors that have suffered badly during the COVID-19 crisis, such as oil and gas, automakers and travel and leisure, were up between 4.9 percent and 5.8 percent.
The auto-heavy Germany DAX is just 6.7 percent away from hitting an all-time high.
It closed up 3.36 percent at 12,847.68 on Friday, increasing 10.88 percent from a week earlier.
“It only takes a small change in sentiment toward these stocks — a glimmer of optimism that the virus is under control or ever increasing stimulus — and investors will question whether the reversal has begun,” said Lewis Grant, a senior portfolio manager at Federated Hermes.
“These rallies can become self-sustaining as more investors rush in through fear of missing out,” he added.
Analysts at Bank of America on Friday forecast European stocks would rise another 10 percent by the end of September on expectation of a pick-up in business activity.
Meanwhile, London-listed shares ended at near three-month highs, marking their third straight week of gains as optimism.
The blue-chip FTSE 100 closed up 2.25 percent at 6,484.30, up 6.71 percent from a week earlier, posting its best week in nearly two months.
Hopes of a revival in tourist traffic helped British Airways owner IAG jump 13.6 percent, while shares in EasyJet, Lufthansa and Air France gained between 5.5 percent and 12.5 percent.
Airbus rose 12.5 percent after Australia’s Qantas announced plans to reactivate plans to order planes.
“Investors continued to bid up airlines despite the sector being in turmoil, betting that they will survive the crisis and that their shares have been oversold,” said Russ Mould, investment director at AJ Bell.
British stocks have gained substantially over the past two weeks, with the domestically focussed mid-cap index rising sharply after the UK government outlined plans to reopen several retail spaces from June.
Shopping center operator Hammerson PLC was the best weekly performer among British stocks, adding 86 percent in its best week ever, after it said that its flagship destinations in England would reopen from June 15.
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