(Reuters) – European stocks rose on Thursday as Swedish retailer H&M and French-ItalianĀ chipmaker STMicroelectronics jumped after reporting forecast-beating results, while hopes of more U.S. stimulus aided global sentiment.

H&M

surged 6.2% as it reported a third-quarter profit above analysts’ expectations and said sales continued to recover in September. The retail index <.SXRP> rose 1.6% to lead sectoral gains.

Paris-listed shares of STMicroelectronics

jumped 6.1% after it forecast 2020 sales above previous estimates and said a sharp rise in automotive and microcontroller demand helped third-quarter preliminary results.

Shares of peers Infineon Technologies

, Dialog Semiconductor , ASMI

and ASML

gained between 2.0% and 5.3%.

After European markets ended the third quarter subdued on worries about a resurgence in European COVID-19 cases, Brexit deal and the U.S. presidential election, the mood brightened on Thursday amid signs of progress of a stimulus bill in Washington.

“The renewed optimism regarding a deal led to a decent enough start in Europe,” Connor Campbell, financial analyst at SpreadEx wrote in a note. “If a deal doesn’t materialise tonight … the markets could wakeup with a nasty hangover.”

The pan-European STOXX 600 index <.STOXX> rose 0.5%, but came off session highs, with bourses in Paris <.FCHI> and London <.FTSE> up about 0.7%.

German stocks <.GDAXI> edged up 0.1%, weighed down by a 10.7% slump in drugs company Bayer

after it flagged that adjusted profit may slip next year and it may have to write down the value of agriculture assets by close to 10 billion euros.

A final reading of German manufacturing activity in September showed recovery accelerated, with IHS Markit’s Purchasing Managers index (PMI) rising to 56.4, even though it was below a flash estimate of 56.6.

Spanish and French PMI readings were better than expected, while the broader euro zone recovery was in line with expectations.

British retailer Halfords

raced 20% higher after raising its first-half profit outlook as a coronavirus-driven cycling boom continues.

Italy’s Banco BPM

rose 1.6% after sources told Reuters that bad loan managers AMCO and Credito Fondiario are in a race to buy loans known as ‘unlikely to pay’ worth around 1 billion euros from the bank.

Deutsche Telekom rose 2.1% after Goldman Sachs added the company to its conviction list, while Denmark’s Orsted

gained 3.3% after Berenberg started covering its stock with a “buy” rating.

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

Copyright 2020 Thomson Reuters.

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