Wall Street sets upbeat tone for European stocks, UK airlines jump
August 19, 2020
By Sruthi Shankar
(Reuters) – European stocks closed higher on Wednesday following new record highs for Wall Street’s main indexes, while UK airlines rallied on hopes of a shorter quarantine period for travelers.
After a feeble start, the pan-European STOXX 600 <.STOXX> climbed 0.7%, with stock markets in Germany, London and France <.GDAXI> <.FTSE> <.FCHI> all gaining ground.
British Airways-owner IAG <ICAG.L> surged 7.6% and easyJet <EZJ.L> rose 3.3% on news that Britain’s government was working with Heathrow Airport on a plan to use COVID-19 testing to help shorten quarantine times.
The travel sector has come under pressure as several countries in Europe have imposed new travel curbs because of a pick-up in coronavirus cases.
“A full-blown lockdown looks unlikely,” Andrew Kenningham, chief Europe economist at Capital Economics wrote in a note. “The second wave will hold back the recovery, but it will probably not cause another deep recession.”
Danish shipping group Maersk <MAERSKb.CO>, a bellwether for global trade, issued forecast-beating full-year earnings and said it expected demand for moving containers at sea to return to pre-COVID levels in the first half of next year. Its shares jumped 5.0%.
Trillions of dollars in stimulus and a rally in technology stocks drove the S&P 500 to new record highs, with Apple <AAPL.O> becoming the first publicly listed U.S. company to record $2 trillion in market capitalisation. [.N]
The U.S. Federal Reserve’s minutes from its latest policy meeting are due later on Wednesday, with investors looking for clues on further action that the U.S. central bank could take in September.
Investors were unfazed by data that showed a measure of euro zone inflation surged in July, surprising many economists who interpreted the figure as “almost certainly more noise than signal.”
Brewery Royal Unibrew <RBREW.CO> jumped 9.8% to the top of STOXX 600 after it raised its 2020 earnings forecast.
Utilities took a hit as RWE <RWEG.DE> fell 4.6% as the German company launched a share issue to finance its purchase of wind turbine maker Nordex’s <NDXG.DE> project development pipeline.
Finland’s biggest utility Fortum <FORTUM.HE> slid 4.9% as it reported an 11% fall in its underlying second-quarter operating profit.
The biggest decliner on the STOXX 600 was Belgian biotech company Galapagos <GLPG.AS>, which slumped 24.4% after U.S. health regulators rejected its lead product filgotinib to treat rheumatoid arthritis.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur and Jane Merriman)