By Sruthi Shankar
(Reuters) -European stocks were on track for weekly gains on Friday as news that Britain was mulling easing travel restrictions boosted airlines and hotel groups, while a rebound in luxury stocks also supported the main indexes.
The pan-European index rose 0.5%, reversing losses earlier this week on worries about slowing global growth and tighter regulation of Chinese firms.
After closing up 3.4% on Thursday in one of the best single-day performances this year, the European travel and leisure index added 1.1%.
Wizz Air, British-Airways-owner IAG (LON:) and InterContinental Hotels rose between 0.5% and 4.0% after Britain considered easing its COVID-19 rules for international travel. ()
“The one area that has surprised and continues to surprise is Europe. We’ve U.S. and China where data looks like they’re slowing a little bit,” said Adam Mac Nulty, portfolio manager at Brandes Investment Partners.
“Next year, we’re looking at high single-digit EPS growth in Europe and for a market that is trading at mid-teen multiples, we think that is attractive.”
China-exposed luxury stocks such as LVMH, Kering (PA:), Hermes and Richemont rebounded, following sharp losses earlier this week on fears of fresh coronavirus-related restrictions and regulatory moves in China.
40 and Spain’s IBEX outperformed regional peers with a 1.0% and 1.2% gain, respectively.
While European stock markets looked set to end the week on a steady footing, next week could be pivotal in determining near-term market direction, with the U.S. Federal Reserve and the Bank of England’s policy meetings, as well as German elections on deck.
Germany’s Commerzbank (DE:) climbed 4.4% after a Handelsblatt report said U.S. investor Cerberus was considering taking a 15.6% state in the bank after the federal election.
Miners took a hit, with Anglo American (LON:) tumbling 3.8% after Morgan Stanley (NYSE:) and UBS downgraded the stock. Worries about slowing Chinese growth put the European mining index on course for a 5% weekly decline.
Investors also largely looked past data that showed British retail sales unexpectedly fell again in August in what is now a record streak of monthly declines. ()
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