European stocks rebound as banks, autos rally
By Sruthi Shankar
Oct 23 (Reuters) - European stocks rose on Friday, boosted by positive earnings updates from Barclays and carmakers, but nagging worries about the economic impact of surging COVID-19 cases put markets on course for their biggest weekly decline in a month.
The pan-European STOXX 600 index .STOXX advanced 0.9%, with London's FTSE 100 .FTSE outperforming its European peers after Barclays BARC.L jumped 5.6% on strong results.
Carmaker Daimler DAIGn.DE rose 2.3% as it raised its 2020 profit outlook after a 24% jump in demand for luxury cars in China in the third quarter.
Sectors considered more economically sensitive such as banks .SX7P, automakers .SXAP and oil & gas .SXEP found favour. European lenders were on course for their best monthly performance in over a year.
"Opposite forces are in play at the moment," said Emmanuel Cau, head of European equity strategy at Barclays. "Globally you've these two main sources of growth - U.S. and China - that are still recovering, so part of European market will still benefit from the strength outside of Europe."
"But the domestic part of the market exposed to mobility and restrictions are impacted by the second wave."
Indicating this trend, IHS Markit's survey of purchasing managers showed German manufacturing sector expanded at a faster rate in October, but services activity shrank, suggesting Europe's largest economy is operating at two speeds.
The broader euro zone economic activity slipped back into decline this month.
Meanwhile, the mood in global markets was that of caution with less than two weeks to go before the U.S. presidential election. GLOB/MKTS
France looked set to widen a curfew to more than two-thirds of its population after the country set an all-time daily high of new coronavirus cases on Thursday.
Finance Minister Bruno Le Maire said the GDP will likely contract in the fourth quarter, adding that curfew measures would cost around two billion euros ($2.36 billion).
France's Renault RENA.PA gained 2.3% after saying it should have positive cash flow from cars by the end of 2020 as sales recovered.
Luxury group Kering PRTP.PA fell 2% as its star Gucci brand underperformed rivals.
Holiday Inn-owner InterContinental Hotels IHG.L slipped 0.7% as it posted a 53.4% fall in quarterly revenue per available room.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Bernard Orr and Sriraj Kalluvila)
((firstname.lastname@example.org; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.