UPDATE 2-European shares up on defensive plays as stimulus hopes laced with caution

  • Reuters
  • Stock Market News
UPDATE 2-European shares up on defensive plays as stimulus hopes laced with caution
Credit: © Reuters.

* Utilities, telecom sectors lead gains

* Germany's Hellofresh tops STOXX 600

* Italy stocks up as govt considers lockdown measures

* Roche gains as China to use its drug to treat coronavirus (Updates to close)

By Ambar Warrick and Sruthi Shankar

March 4 (Reuters) - European shares rose on Wednesday, with defensive sectors gaining the most as investors grappled with the efficacy of monetary stimulus in offsetting the economic impact of the coronavirus.

While the Fed's 50 basis points cut on Tuesday did see markets increasing bets on similar moves from other central banks, the fact that it was the Fed's first rate cut outside of a regularly scheduled policymaker meeting since the 2008 crisis led to heightened concerns over the outbreak. pan-European STOXX 600 index .STOXX rose 1.4%, with the utilities .SX6p and telecom .SXKP sectors leading gains.

Danish wind farm developer Orsted A/S ORSTED.CO surged more than 5%, leading utilities higher after it upped its annual core earnings forecast. investors seem pretty pleased with the stimulus situation," said Connor Campbell, analyst at financial spread better Spreadex.

"Still, somewhat cautious because there is still so much uncertainty over how much central banks over the world have to work with, and how much these rate cuts will help."

Money markets in the euro zone are pricing a 90% chance that the ECB will cut its deposit rate, now minus 0.50%, by 10 basis points next week. ECBWATCH

However, sources told Reuters that policy action was not on the agenda of an unscheduled telephone conference call held by ECB policymakers late on Tuesday to discuss their emergency response to the coronavirus outbreak. to concerns over the virus outbreak, International Monetary Fund Managing Director Kristalina Georgieva said on Wednesday that the faster spread of the coronavirus will wipe out any hope of stronger global growth in 2020. stocks .SXDP jumped, with Roche Holding AG ROG.S gaining more than 3% after Chinese health authorities said it would use the Swiss pharma giant's arthritis drug to treat some coronavirus patients in severe conditions. stocks .FTMIB closed 0.9% higher as the country prepared drastic new emergency measures to try and slow the spread of coronavirus in Europe's worst hit country. online food delivery company Hellofresh HFGG.DE jumped 10.7%, topping the STOXX 600 as it extended gains following strong annual results.

The travel and leisure index .SXTP ended 1.6% lower as major hotel and airline stocks continued to be battered by virus-related disruptions hurting demand.

Aviation support services provider Signature Aviation Plc SIGSI.L sank 6.1% to the bottom of the STOXX 600 after Barclays (LON: BARC ) and JP Morgan cut the stock's target price.

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