European stocks extended gains on Thursday, as data show the economic recovery grinds ahead, with signs afoot of potentially more stimulus.
Up 1.7% on Wednesday and 33% from its March lows, the Stoxx Europe 600
The gains came after relief from the breakneck rise of the euro
and the pound
against the dollar. Comments this week from European Central Bank chief economist Philip Lane that the euro/dollar rate does matter have raised expectations ahead of the ECB meeting next week.
But the backdrop for the advance is the rally on Wall Street, which on Wednesday sent the S&P 500
to its 22nd record high and the Nasdaq Composite
to its 43rd record. In the U.S., it wasn’t technology stocks but utilities and materials companies that paced the gains. Reports of new talks over the stalled stimulus bill have fanned expectations of a deal.
Meanwhile, a host of data from the service sector, on both sides of the Atlantic, should show the economy continuing to move toward its pre-pandemic levels. The eurozone services purchasing managers index barely held above the 50 level indicating expansion, while U.K. services PMI jumped in August.
The popular Euro Stoxx 50
will be reshuffled, with banks Société Générale
headlining the five getting removed, and Banco Santander
is getting axed from the Stoxx Europe 50. European banks, already struggling with years of negative interest rates and little growth, took a cumulative €33 billion of loan-loan provisions in the second quarter, according to Deutsche Bank. The Euro Stoxx bank index
has slumped 37% this year.
Of stocks on the move on Thursday, Siemens Healthineers
fell 4% after saying it sold €2.73 billion of new shares to institutional investors, to help finance its purchase of Varian Medical Systems.
jumped 13%, after the loss-making U.K. company said trading over the summer was at the higher end of its expectations. Like many companies, it said it wouldn’t pay a dividend.