By Amal S and Shreyashi Sanyal
(Reuters) -European stocks climbed for a second straight session on Thursday as construction stocks gained on upbeat sales forecast from Saint Gobain and commodity-linked shares rose on hopes of larger U.S. stimulus after Democrats won Senate control.
The pan-European STOXX 600 index advanced 0.5% to near February 2020 highs, while London’s blue-chip FTSE 100 gained 0.2% and Germany’s DAX index was up 0.6%.
Construction & material stocks were the top gainers, led by a 2.3% rise in France’s Saint Gobain after it said fourth-quarter results would significantly exceed expectations.
Meanwhile, economically sensitive sectors such as mining , energy and industrials extended their rally on the prospects of more U.S. stimulus after Democrats won control of the Senate.
“While a Blue Wave could pave the way for stricter regulations and tax hikes, investors try to see it from a positive side… and further stimulus measures are likely to follow and without a months-long stalemate,” said Milan Cutkovic, market analyst at Axi.
Gains in Swedish industrial companies Atlas Copco, Sandvik and Volvo drove Stockholm stocks to all-time highs.
“We highlight that Basic Resources, Construction & Materials have underperformed since the beginning of December and, given their sensitivity to fiscal policy in general through infrastructure investment, they have catch up potential,” Unicredit analysts said in a note.
European wind turbine makers Vestas, Orsted and Siemens Gamesa all extended gains from the previous session.
Renewable stocks are widely considered as winners of a Joe Biden administration, given the U.S. president-elect’s proposed $2 trillion climate plan.
Sentiment was also boosted by European approval for a second COVID-19 vaccine developed by Moderna Inc.
Meanwhile, demand for German-made goods defied expectations, rising 2.3% in November, the latest in a string of data points showing the Europe’s largest economy being unexpectedly resilient in the face of the pandemic.
Among other movers, LafargeHolcim rose 2.4% after the world’s biggest cement maker said it would buy Firestone Building Products from Bridgestone Americas in a deal worth $3.4 billon.
Delivery Hero slipped 2.9% after the German food delivery firm said it raised around 1.2 billion euros ($1.48 billion) by issuing new shares to fund growth.
Mitchells & Butlers dropped 3.2% after the British pub operator said it was exploring an equity capital raise as a new national lockdown shut its sites across England.
(Reporting by Amal S and Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila and Nick Zieminski)
