MILAN: European stocks hit a near three-week high on Tuesday, as US stimulus bets and encouraging data out of China and Germany galvanised growth-linked cyclical sectors like travel and leisure, banking and automakers. The pan-European STOXX 600 index closed 1.7% higher, with Wall Street's S&P 500 coming in close quarters with an all-time high as investors hoped for more US fiscal stimulus.
Carmakers surged 4.4% in Europe after data showed China's auto sales climbed 16.4% in July, the fourth straight month of gains as the world's biggest vehicle market comes off lows hit during the coronavirus lockdown.
Other hard-hit sectors like travel & leisure, oil & gas and banks jumped between 3.7% and 4.5%. Unprecedented monetary and fiscal stimulus, hopes of a Covid-19 vaccine and Europe's relative success in limiting the spread of coronavirus have helped the STOXX 600 climb 38% from its March lows, but remains about 15% below its record highs.
Holiday Inn-owner InterContinental Hotels gained 4.8% as it saw some "very early" signs of a recovery in demand, but its profit slumped 82% in the first half of 2020. German online fashion retailer Zalando SE rose 1.9% after reporting a more than doubling of sales on its site.
Of the 240 companies in the STOXX 600 that have reported second-quarter earnings so far, 60.4% topped analysts' estimates, according to Refinitiv Eikon data. In a typical quarter, half beat estimates. Banco BPM surged 6.9% on expectations that Italy's third-largest bank could become involved in a possible merger.
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