European stocks rebound slightly, supported by oil and tobacco - Metro US

European stocks rebound slightly, supported by oil and tobacco

The German share price index DAX graph at the stock exchange in Frankfurt

(Reuters) – A jump in oil and tobacco shares helped European stocks close higher on Tuesday, with the main indexes partially recovering from a selloff triggered by fears of new lockdowns as COVID-19 cases spike across the continent.

The pan-European STOXX 600 index <.STOXX> rose 0.2% after Monday’s 3.2% drop, while the German DAX <.GDAXI> was up 0.4% and Italy’s FTSE MIB <.FTMIB> gained 0.5%.

Britain’s exporter-heavy FTSE 100 <.FTSE> added 0.4%, benefiting from a weaker pound after Prime Minister Boris Johnson told people to work from home where possible and ordered bars and restaurants to close early to tackle a fast-spreading second wave of infections. [.L]

London-listed oil majors Royal Dutch Shell <RDSa.L> and BP <BP.L> jumped nearly 3%, with crude prices rising on expectations that renewed restrictions would have only a limited impact on fuel demand.

Britain’s midcap index <.FTMC>, made up of more domestically focussed companies, slipped 0.3%.

“Many such measures will hit parts of consumer spending (mostly services such as leisure, entertainment, tourism) disproportionately,” Berenberg economist Holger Schmieding said in a note. “We expect these measures to temporarily dampen but not derail the overall economic rebound.”

Data showed euro zone consumer confidence rose to -13.9 in September from -14.7 in August, the European Commission said, while the Ifo Institute upgraded its forecast for Germany, expecting GDP to shrink 5.2% this year, an improvement on its last projection of a 6.7% drop.

A slew of rating actions also helped, with British American Tobacco <BATS.L> gaining 4.1% and Imperial Brands <IMB.L> up 3.2% after RBC boosted its ratings to “outperform”.

Danish shipping firm AP Moeller Maersk <MAERSKb.CO> jumped 5.2% after JPMorgan upgraded the company to “overweight”.

Travel & leisure stocks <.SXTP> fell 1.1%, adding to a 5.2% drop in the previous session, with surging COVID-19 cases across Europe threatening to hamper travel demand again.

Premier Inn-owner Whitbread <WTB.L> slipped 2.8% after saying it plans to cut 6,000 jobs in its hotel and restaurant units due to the pandemic’s impact on the industry.

Britain’s Beazley <BEZG.L> said it expected claims linked to the pandemic to double to $340 million, driving its shares down 14.1%. Europe’s insurance sector <.SXIP> was down 1.6%.

Airbus SE <AIR.PA> fell 2.7% after CEO Guillaume Faury told a French radio station that the situation with airlines was worse than expected.

Deutsche Bank <DBKGn.DE> slipped 1% after an executive told Reuters it plans to shutter one in five branches in Germany.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Pravin Char)

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