UPDATE 2-Euro zone shares flat as EU recovery plan awaited; Ericsson soars

  • Reuters
  • Stock Market News
UPDATE 2-Euro zone shares flat as EU recovery plan awaited; Ericsson soars
Credit: © Reuters.

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* EU heads meet for talk, markets expect a deal soon

* Sweden's Ericsson (BS: ERICAs ) surges as profit beats

* Banks, oil companies weigh as virus concerns lurk

* STOXX 600 posts third straight week of gains

* Auto stocks biggest boost; Daimler leads (Updates to close)

By Sruthi Shankar and Susan Mathew

July 17 (Reuters) - Euro zone shares were little changed on Friday as investors awaited the outcome of an European Union summit where leaders are expected to hammer out details of a 750-billion-euro ($858 billion) recovery fund.

The euro zone STOXX index .STOXXE was flat after rallying earlier this week to the highest since early June, mostly on hopes an EU-wide fund to support pandemic-struck economies could lift the bloc out of recession. Chancellor Angela Merkel warned "the differences are still very, very big," as she arrived at the summit in Brussels. believe markets could tolerate a few days or weeks of delay, with opposition from the Netherlands and the threat of a Hungarian veto weighing on chances of a deal on the EU's 2021-27 budget - envisaged at slightly above 1 trillion euros - and the attached recovery fund. cautious comments suggested EU leaders might not be able to reach a compromise," said Edward Moya, senior market analyst at OANDA, New York. "Negotiations are expected to be tough ... but optimism is high that a breakthrough will be made at the two-day summit."

Meanwhile, the United States shattered its daily record for coronavirus infections on Thursday, raising fears of a slower recovery in the world's largest economy. pan-European STOXX 600 index .STOXX closed up 0.2% as gains in automakers .SXAP , commodity .SXPP and technology stocks .SX8P of more than 1% outweighed losses in banks .SX7P , energy .SXEP , travel and leisure stocks .SXTP .

For the week, the index was up 1.6% for its third straight week of gains, as reports of progress in developing a COVID-19 vaccine supported cyclical stocks.

AstraZeneca AZN.L was the biggest boost on the pan-region index, hitting a two-month high. Russia's wealth fund said it was set to unveil a deal with the British drugmaker to manufacture a COVID-19 vaccine being developed along with Oxford University. main stock index .OMXSPI scaled a near five-month high as telecoms equipment maker Ericsson ERICb.ST surged 11.4% after smashing core profit expectations. Its shares posted their best one-day percentage gain in more than two years. group Swedish Match AB SWMA.ST jumped 10.4% on better-than-expected quarterly profit. auto stocks, Daimler DAIGn.DE rose 4.4% after posting a smaller-than-expected operating loss in the second quarter, while truck maker Volvo AB VOLVb.ST rose after beating profit forecasts. = 0.8745 euros)

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