(Reuters) - European stocks racked up their best week in two months on Friday, with investors scooping up battered shares of banks, automakers and travel companies amid growing signs that the pandemic-hit global economy is recovering.
The pan-European STOXX 600 ended the day 2.5% higher, getting an afternoon boost from data that showed U.S. economy unexpectedly added jobs in May after suffering record losses the prior month.
Euro zone blue chip stocks .STOXXE jumped 3.8% and the bloc’s lenders .SX7E rallied 7.6% for their best weekly gain since 2008’s global financial crisis.
Risky assets across the world have been lifted this week as economies continued to emerge from their lockdowns, while a bigger-than-expected stimulus package from the European Central Bank and hopes for European-Union wide fiscal action gave a further boost to the continent’s markets.
Growth-sensitive cyclical sectors that have suffered badly during the coronavirus crisis, such as oil & gas .SXEP, automakers .SXAP and travel & leisure .SXTP, were up between 4.9% and 5.8%.
The auto-heavy Germany DAX .GDAXI is just 6.7% away from hitting an all-time high.
“It only takes a small change in sentiment toward these stocks – a glimmer of optimism that the virus is under control or ever increasing stimulus – and investors will question whether the reversal has begun,” said Lewis Grant, a senior portfolio manager at Federated Hermes.
“These rallies can become self-sustaining as more investors rush in through fear of missing out,” he added.
Analysts at Bank of America on Friday forecast European stocks would rise another 10% by the end of September on expectation of a pick-up in business activity.
(Graphic: European stocks recover nearly 2/3rd of virus-led losses, here)
Hopes of a revival in tourist traffic helped British Airways owner-IAG (ICAG.L) jump 13.6%, while shares in easyJet (EZJ.L), Lufthansa (LHAG.DE) and Air France (AIRF.PA) gained between 5.5% and 12.5%.
German fashion house Hugo Boss (BOSSn.DE) was up 11.4% after it confirmed ongoing talks for a new chief executive officer with Daniel Grieder, former head of Tommy Hilfiger Global & PVH Europe.
Reporting by Sruthi Shankar and Aaron Saldanha in Bengaluru; Editing by Arun Koyyur, Kirsten Donovan