Europe close: Banks and travel stocks drive markets higher
Decent gains in the banking and travel-leisure sector drove European markets higher on Tuesday as stocks rebounded following a sell-off last week, as investors await central bank meetings across the continent.
Central banks in Norway and the UK are expected to hold rates steady at policy meetings this week, while the Swiss National Bank is forecast to cut by 25 basis points.
The Stoxx 600 rose 0.7% to 515.01 with indices across the region all in positive territory.
The pan-European benchmark index dropped 2.4% last week on the back of rising political uncertainty following European Parliament elections, with French president Emmanuel Macron calling for a surprise snap election and ratings agencies showing concerns about France's credit rating.
''European stock indices are on track for a second day of gains as more bargain hunters enter the fray, even though trading volumes are light ahead of the US Juneteenth holiday on Wednesday," said Axel Rudolph, senior market analyst at IG.
In economic news, the cost of living in the single currency bloc rose slightly last month as the cost of services picked up, official data showed, with the eurozone's harmonised consumer price index rising 0.2% from April to 2.6%. Tuesday's readings were in line with the preliminary estimates that had been published at the end of the previous month.
German business sentiment improved less than expected in June, according to a survey by the ZEW Center for European Economic Research in Mannheim. The headline ZEW investor expectations index rose to 47. 5 from 47.1 in May, but this was below expectations for a reading of 50.0.
Banks and travel stocks rise
Banking stocks were among the day's best performers, with French lenders Credit Agricole, BNP Paribas and Societe Generale all attempting to rebound after heavy falls over the past week.
London's HSBC, Lloyds, NatWest and Barclays were also in demand, along with Frankfurt-listed Commerzbank and Deutsche Bank and Milan's Banca MPS and BPER Banca.
Travel and leisure stocks were also on the rise, led by London-listed hotel and restaurant owner Whitbread gained as it remained confident on its full-year outlook despite flat first-quarter sales growth. Meanwhile, airlines IAG, easyJet, Air France-KLM and Deutsche Lufthansa all rose.
Also on the FTSE 100, equipment rental group Ashtead fell as profits came in shy of expectations, as the company pointed to a further moderation of growth in the coming year.
Shares in French supermarket giant Carrefour slumped after reports in domestic media said the economic and finance ministry had recommended a substantial fine against the company for its franchise network management. The report from the daily newspaper La Lettre, included a 160-page subpoena suggesting a fine of €200m, claiming around 5,200 franchisee stores contained "a significant imbalance" which profited the group.