Europe Markets

European stocks close over 2% higher as reopening optimism outweighs U.S. unrest

Key Points
  • The pan-European Stoxx 600 closed over 2% higher.
  • Coronavirus news remains in focus for markets.
  • Investors also kept a close watch on U.S. unrest.

European stocks marched higher Wednesday as optimism over the reopening of major economies outweighed investor fears over widespread protests in the U.S.

The pan-European Stoxx 600 closed up by more than 2% provisionally, with all sectors and major bourses in positive territory. Insurance stocks were the best performers, gaining over 6%.

Investors around the world are keeping an eye on continuing unrest in the U.S. in the wake of the death of George Floyd, an unarmed black man, while he was in the custody of the Minneapolis police last week.

State and local officials ramped up efforts to contain the protests Tuesday evening, adding to police forces and imposing earlier curfews as demonstrators took to the streets in major cities across the U.S. for another night of demonstrations.

On Wall Street, stocks rose sharply on the back of better-than-expected economic data, which bolstered optimism over the recovery from coronavirus-led shutdowns.

The coronavirus remained firmly in focus for markets. White House health advisor Dr. Anthony Fauci said Tuesday that he worries about the "durability" of a potential coronavirus vaccine, noting that there's a chance a vaccine may not provide long-term immunity.

Back in Europe, IHS Markit's final composite PMI (purchasing managers' index) readings on Wednesday indicated that euro zone business activity suffered another devastating contraction in May, but the downturn eased to a reading of 31.9 from April's 13.6. Anything above 50 represents an expansion.

In corporate news, Lufthansa reported a net loss of 2.1 billion euros ($2.35 billion) for the first three months of the year. The German airline's stock was up 4.3% during afternoon trade.

French luxury goods group LVMH's proposed $16.2 billion takeover of Tiffany & Co. is now looking uncertain, with fashion publication WWD reporting that LVMH's board has reservations amid the coronavirus pandemic and the unraveling security situation in the U.S.

Biggest movers

British property developer Hammerson surged another 24% ahead of the reopening of its sites on June 15, while mall operator Unibail-Rodamco-Westfield jumped almost 15% ahead of the impending reopening of most of its outlets.

Renault added more than 10% after Goldman Sachs upgraded the French automaker's stock to "buy," citing a shifted focus toward profitability and away from growth.

At the bottom of the European blue chip index, Swedish radiation therapy company Elekta fell nearly 7% after the resignation of its president and CEO.