UPDATE 1-European shares hit record high; carmakers cheer China stimulus

  • Reuters
  • Stock Market News
UPDATE 1-European shares hit record high; carmakers cheer China stimulus
Credit: © Reuters.

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

* China-focused sectors rally

* Airbus down as U.S. raises aircraft import fees

* Germany's DAX hits record high (Adds comment, updates prices)

By Ambar Warrick

Feb 17 (Reuters) - European shares hit a record high on Monday, with automobile stocks leading gains amid fresh attempts by China to limit the economic impact of the coronavirus outbreak.

Automobile stocks .SXAP , which are highly sensitive to Chinese demand and industrial output, surged 2%, led by French car parts group Faurecia EPED.PA after reporting a rise in annual profits and sales. that several European companies, particularly the automobile sector, depend on China as part of their supply chain, local markets are likely to take any fresh stimulus measures as a positive.

China cut interest rates and flagged possible tax cuts as it struggles to limit the economic impact from the coronavirus outbreak, which has killed more than 1,700 people in the country. fact that China keeps signalling that they're ready to somewhat bubblewrap the economy by pumping in stimulus - that's what's keeping markets in the green today," said Connor Campbell, analyst at financial spread better Spreadex.

The pan-European STOXX 600 index .STOXX rose 0.2% by 0906 GMT, having touched a record high of 432.48 earlier in the day. Market activity is expected to be light through the rest of the day on account of a U.S. holiday.

The automaker-heavy German stock index .GDAXI also touched a record high.

"This week is interesting because we've got manufacturing PMIs (on Friday), I think it will give an idea of some impact on supply chains from the coronavirus," Spreadex's Campbell added.

The resources .SXPP and oil and gas sectors .SXEP were also among the best performing subindexes for the day, given their heavy export exposure to China. Both sectors have also taken some support from recent weakness in the euro EUR= and the pound GBP= .

Among individual movers, London-listed Jupiter Fund Management JUP.L topped the STOXX 600 after it agreed to buy Merian Global Investors in a deal that will make Jupiter Britain's second-largest retail funds provider. herbicide providers Bayer AG BAYGn.DE and BASF SE BASFn.DE fell 2.3% and 1.1%, respectively, after a U.S. peach grower was awarded $265 million in a lawsuit against the two. aircraft maker Airbus SE AIR.PA fell 1.7% after the U.S. on Friday said it would lift tariffs on aircraft imported from the EU amid a nearly 16-year transatlantic dispute over aircraft subsidies.

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