European stocks rebound as earnings support; focus on ECB meet

[October 29, 2020]  By Sruthi Shankar

(Reuters) - European stocks recovered slightly on Thursday on the back of strong earnings from oil major Royal Dutch Shell and chip equipment supplier ASM, but sentiment remained fragile a day after lockdown fears sparked a sharp selloff.

The pan-European STOXX 600 index <.STOXX> rose 0.3% after closing at a five-month low in the previous session, while the German DAX <.GDAXI> advanced 0.6% and UK's FTSE 100 <.FTSE> and France's CAC 40 <.FCHI> rebounded from multi-month lows.

Real estate <.SX86P>, oil & gas <.SXEP> and technology stocks <.SX8P> rose more than 1%, leading sectoral gains.

UK's Royal Dutch Shell <RDSa.L> rose 2.5% as the company lifted its dividend after easily beating third-quarter profit forecasts.

Dutch firm ASM International <ASMI.AS> gained 3.8% as it raised its fourth-quarter guidance.

Stock markets around the world dived on Wednesday after Germany and France imposed nationwide restrictions - nearly as severe as the ones that drove the global economy this year into its deepest recession in generations - as coronavirus cases surged.

"Things look quite bleak in terms of what's going on with the coronavirus," said Niall Gallagher, investment director for European equities at GAM.

"But there's a potential for a vaccine to emerge around the turn of the year," said Gallagher, who has been using the selloff as an opportunity to snap up companies whose businesses might benefit from a COVID-19 vaccine.

Investors were also hopeful that the European Central Bank could pave the way for more monetary policy easing in December to support the euro zone economy. The ECB is scheduled to announce its decision at 1245 GMT.

In the busiest day for European reporting season, telecom stocks took a beating as Finnish telecom network equipment maker Nokia <NOKIA.HE> slumped 17.2% after it cut its full-year profit forecast.

Volkswagen AG <VOWG_p.DE> rose 2.3% as it returned to quarterly profit on surging Chinese demand for luxury cars.

BT <BT.L>, Britain's biggest fixed-line and mobile operator, gained 6.2%, helped by a strong operational performance in the first half of the year.

France's Orange <ORAN.PA> jumped 5% as deals to open up its fibre network to rivals helped offset the financial hit from the coronavirus crisis in the third quarter.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)

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