UPDATE 2-European stocks rebound slightly, supported by oil and tobacco

  • Reuters
  • Stock Market News
UPDATE 2-European stocks rebound slightly, supported by oil and tobacco
Credit: © Reuters.

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

* Oil stocks jump as crude prices gain

* UK midcaps weaker as lockdown measures awaited

* Travel stocks extend declines as virus cases rise

(Updates to market close)

By Sruthi Shankar

Sept 22 (Reuters) - A jump in oil and tobacco shares helped European stocks close higher on Tuesday, with the main indexes partially recovering from a selloff triggered by fears of new lockdowns as COVID-19 cases spike across the continent.

The pan-European STOXX 600 index .STOXX rose 0.2% after Monday's 3.2% drop, while the German DAX .GDAXI was up 0.4% and Italy's FTSE MIB .FTMIB gained 0.5%.

Britain's exporter-heavy FTSE 100 .FTSE added 0.4%, benefiting from a weaker pound after Prime Minister Boris Johnson told people to work from home where possible and ordered bars and restaurants to close early to tackle a fast-spreading second wave of infections. .L

London-listed oil majors Royal Dutch Shell RDSa.L and BP BP.L jumped nearly 3%, with crude prices rising on expectations that renewed restrictions would have only a limited impact on fuel demand. O/R

Britain's midcap index .FTMC , made up of more domestically focussed companies, slipped 0.3%.

"Many such measures will hit parts of consumer spending (mostly services such as leisure, entertainment, tourism) disproportionately," Berenberg economist Holger Schmieding said in a note. "We expect these measures to temporarily dampen but not derail the overall economic rebound."

Data showed euro zone consumer confidence rose to -13.9 in September from -14.7 in August, the European Commission said, while the Ifo Institute upgraded its forecast for Germany, expecting GDP to shrink 5.2% this year, an improvement on its last projection of a 6.7% drop. slew of rating actions also helped, with British American Tobacco (JO: SNHJ ) BATS.L gaining 4.1% and Imperial Brands IMB.L up 3.2% after RBC boosted its ratings to "outperform". shipping firm AP Moeller Maersk MAERSKb.CO jumped 5.2% after JPMorgan (NYSE: JPM ) upgraded the company to "overweight".

Travel & leisure stocks .SXTP fell 1.1%, adding to a 5.2% drop in the previous session, with surging COVID-19 cases across Europe threatening to hamper travel demand again.

Premier Inn-owner Whitbread WTB.L slipped 2.8% after saying it plans to cut 6,000 jobs in its hotel and restaurant units due to the pandemic's impact on the industry. Beazley BEZG.L said it expected claims linked to the pandemic to double to $340 million, driving its shares down 14.1%. Europe's insurance sector .SXIP was down 1.6%. SE AIR.PA fell 2.7% after CEO Guillaume Faury told a French radio station that the situation with airlines was worse than expected. Bank DBKGn.DE slipped 1% after an executive told Reuters it plans to shutter one in five branches in Germany.

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