(Reuters) – European stocks posted a second consecutive week of gains on Friday as bumper forecasts from Denmark’s Pandora and Novo Nordisk set a brighter tone for the earnings season, while investors kept an eye out for signs of fresh U.S. stimulus.
The STOXX 600 index <.STOXX> ended up 0.6% to close the week with a gain of 2.1%.
Global equities advanced this week as growing expectations the Democratic party will win U.S. elections next month revived hopes for more economic stimulus there.
In Europe, a string of mergers and acquisitions as well as a rebound in beaten-down sectors like travel & leisure <.SXTP>, banks <.SX7E> and oil & gas <.SXEP> lifted regional markets.
Shares of aircraft engine maker Rolls Royce
have almost doubled in value since Monday, while British Airways owner-IAG
Jewellery maker Pandora
Drugmaker Novo Nordisk
gained 3.3% after raising its 2020 sales and operating outlook.
German online fashion company Zalando
rose 3.2% and Global Fashion Group
surged 24.0% after upgrading their earnings outlook.
Companies on the STOXX 600 are expected to post a profit decline of 38% in third quarter and 22.7% in the current quarter, according to Refinitiv data, as businesses recoup from the coronavirus-driven hit.
“Even though we’ve had rising infection rates in developed markets for the best part of the month, there hasn’t been any negative impact on consensus earnings forecasts,” said Alastair George, head strategist at Edison Investment Research.
“As long as strict lockdowns can be avoided, equities are likely to continue to make progress on the back of very loose monetary policy and global stimulus packages as well.”
Europe surpassed 100,000 daily reported COVID-19