UPDATE 2-European shares extend rally on vaccine cheer, ECB comments

  • Reuters
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UPDATE 2-European shares extend rally on vaccine cheer, ECB comments
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* Spain, Italy to get COVID-19 vaccines by early 2021

* ECB eyes more bond buys, cheap loans -Lagarde

* ABN Amro drops on cautious outlook

* Nordea Bank falls on stake sale by Finnish insurer Sampo

(Updates prices throughout, adds comments)

By Shashank Nayar and Shreyashi Sanyal

Nov 11 (Reuters) - European shares rose for a third straight day on Wednesday as optimism around a potential COVID-19 vaccine and encouraging comments from European Central Bank chief Christine Lagarde offset worries of economic damage from surging infections.

The pan-European STOXX 600 .STOXX jumped 1%, building on a 6% rally this week as investors bought into utilities .SX6P as well as travel-related stocks .SXTP , a sector that has widely underperformed this year.

Technology stocks .SX8P , which have tracked a surge in their U.S. counterparts since the coronavirus-driven crash in March, gained 2%.

The benchmark STOXX 600 has surged nearly 45% since March, thanks partly to historic global stimulus, but it is still down 6.5% on the year as the resurgence in COVID-19 cases threatens a nascent economic recovery.

By comparison, the U.S. benchmark S&P 500 .SPX has risen nearly 10% this year and was propelled to record highs this week after drugmaker Pfizer Inc (NYSE: PFE ) PFE.N said its COVID-19 vaccine was 90% effective.

ECB President Christine Lagarde said the central bank will focus on more emergency bond purchases and cheap loans for banks when it puts together its new stimulus package next month. "gave a clear message that encouraging news about a vaccine would not stop the bank from loosening policy in December," said Jack Allen-Reynolds, senior Europe economist at Capital Economics.

Spain, which has been among the countries hit hardest by the health crisis, will get its first vaccines in early 2021, while Italy expects to receive an initial 3.4 million shots in January. the European third-quarter earnings season has been largely better than expected, with about 68% of the STOXX 600 companies that have reported so far beating estimates, according to Refinitiv data.

E.ON EONGn.DE , Germany's largest energy firm, gained 1% after it said demand had recovered faster than expected from the coronavirus crisis, while maintaining its 2020 forecast. auto supplier Continental CONG.DE fell 0.8% as it warned of further restructuring expenses in the fourth quarter. bank ABN Amro ABNd.AS slid 5.6% as it remained cautious despite reporting a much better-than-expected quarterly profit. European banks .SX7P rose 0.2%.

Nordea Bank NDASE.ST fell 5% after Finnish insurer Sampo SAMPO.HE said it had sold 4% of the share capital in the bank in an accelerated bookbuild offering to institutional investors. country indexes, German stocks .GDAXI rose 0.4%, while London's FTSE 100 .FTSE and France's CAC 40 .FCHI added 1.4% and 0.5%, respectively.

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