UPDATE 2-European stocks rise for fourth day on healthcare bounce
(For a live blog on European stocks, type LIVE/ in an Eikon news window)
* Cineworld soars on cash boost, targets July reopening
* Defensive sectors lead late rally in Europe
* Markets ignore U.S.-China tensions for now
(Updates to market close)
By Sruthi Shankar
May 28 (Reuters) - European shares rose for a fourth straight session on Thursday, as optimism over businesses returning to work and stimulus for the battered euro zone economy outweighed rising U.S.-China tensions.
The pan-European STOXX 600 index .STOXX rose 1.6% to hit an 11-week high, with healthcare stocks .SXDP rebounding from losses earlier this week.
GlaxoSmithKline GSK.L , the world's largest vaccine maker, gained 2.1% as it laid out plans to produce 1 billion doses of vaccine efficacy boosters for COVID-19 shots next year. defensive sectors such as personal & household goods .SXQP , telecoms .SXKP and utilities .SX6P also rose.
UK cinema operator Cineworld CINE.L surged 21.4% to the top of the STOXX 600 after saying it expected to reopen all its venues in July and had secured additional liquidity. STOXX 600 has risen more than 32% from its March lows as investors hope for a gradual recovery with policymakers injecting trillions of dollars into the global economy and drugmakers racing to develop a COVID-19 vaccine.
The mood in Europe has brightened this week on a 750-billion-euro ($826.35 billion) EU plan to prop up the bloc's virus-hit economies, while hopes are running high the European Central Bank will further expand its bond purchase programme next week, possibly by 500 billion euros. think there's a good chance they will expand their... asset purchase program," Nicola Mai, sovereign credit analyst at PIMCO told the Reuters Global Markets Forum.
"The current purchase envelope will likely be exhausted before year end, and the ECB may want to start providing some more certainty that it remains in play beyond that."
Investors looked past a fresh escalation in Sino-U.S. tensions after China's parliament approved a decision to move forward with national security legislation for Hong Kong. President Donald Trump has promised to take action over the move by the end of the week.
"Markets are taking solace from the fact that neither party seems incentivised to escalate threats economically so far. But I think there will be a point when markets will be fixated on U.S.-China tensions," said Brooks Macdonald Asset Management's Edward Park.
Italian luxury group Salvatore Ferragamo SFER.MI surged 16% after it called back its former chief executive officer to help weather the COVID-19 storm. Scandinavian airline SAS SAS.ST slumped 11.2% after revealing it was in talks with shareholders to raise funds as the collapse in travel demand hurt its quarterly results.
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