UPDATE 1-European shares hit over 1-month high ahead of services, retail sales data
The pan-European STOXX 600 index rose 1%, tracking a strong session in Asia after a survey showed activity in China’s service sector grew for a fourth straight month in August. Travel and leisure stocks led gains across Europe on hopes of a COVID-19 vaccine, while bank stocks bounced back after three straight sessions of losses. But activity in Spain and Italy…
* Spanish service-sector activity contracts
* STOXX 600 needs to close 15 points higher to break tradingrange
* Banks rebound after three days of losses(Adds details, comment, updates prices)
By Ambar Warrick
Sept 3 (Reuters) – European shares rose on Thursday amidsigns of a global economic recovery and hopes of more stimulusmeasures, with eyes on local service-sector and retail salesdata that is likely to show sustained growth.
The pan-European STOXX 600 index rose 1%, trackinga strong session in Asia after a survey showed activity inChina’s service sector grew for a fourth straight month inAugust.
Travel and leisure stocks led gains across Europe onhopes of a COVID-19 vaccine, while bank stocks bouncedback after three straight sessions of losses.
French drugmaker Sanofi and its British peer GSKrose after they announced starting of a clinical trialfor a protein-based COVID-19 vaccine candidate.
While the STOXX 600 hit a more than one-month high, it stillstayed within a trading range seen since early-June. The indexneeds to close at least 15 points higher to break out of therange.
Data from the euro zone is expected to show service-sectorgrowth for a second straight month across the bloc.
But activity in Spain and Italy contracted in August afterthe countries introduced new curbs in the wake of increasedCOVID-19 cases.
A separate reading is expected to show a continued uptrendin euro zone retail sales over July, after volumes were seenreturning to pre-pandemic levels in June.
“Retail sales should capture the strongest part of theeconomic bounce-back. Consumers have emerged from the lockdownwith money to spend and a desire to spend it,” Paul Donovan,Chief Economist at UBS Global Wealth Management wrote in a note.
“Trade data suggests that they are spending on things, notservices. Retail sales may underreport this, given structuralshifts in consumption patterns.”
In corporate news, Germany’s Siemens Healthineersfell 4.5% after it issued 2.73 billion euros ($3.22 billion)worth of new shares to help finance its planned takeover of U.S.peer Varian.
French consulting and IT services provider Capgeminirose 2.5% after it said it expected double-digitrevenue growth in 2020 driven by a gradual second-half recovery.(Reporting by Ambar Warrick in Bengaluru; editing byUttaresh.V)
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