UPDATE 2-European stocks hit 1-week high as investors await U.S. election outcome

  • Reuters
  • Stock Market News
UPDATE 2-European stocks hit 1-week high as investors await U.S. election outcome
Credit: © Reuters.

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* Trump trails Biden in U.S. polls

* BNP Paribas jumps on Q3 profit beat

* Ferraci races higher after upbeat forecast

(Updates to market close)

By Sruthi Shankar

Nov 3 (Reuters) - Banking and auto stocks propelled the European stocks benchmark to a one-week high on Tuesday, while investors anticipated a clear win for Democrat Joe Biden in the U.S. presidential election would lead to more economic stimulus.

The pan-European STOXX 600 .STOXX closed 2.3% higher - its best day since mid-June. Bourses in Frankfurt .GDAXI , Paris .FCHI and London .FTSE saw similar gains.

Stock markets worldwide found strength in signs that Biden held a strong and consistent lead in national opinion polls over Republican President Donald Trump, although the race is tighter in several swing states. Biden win is widely considered to be supportive for European equities in the near-term because of expectations it would mean a bigger stimulus package and better trade ties with the United States.

Banks .SX7P led gains among European sectors, with French lender BNP Paribas BNPP.PA jumping 6.1% as a surge in currency and commodity trading helped it beat quarterly profit estimates. & parts sector .SXAP , which has borne the brunt of the Trump administration's trade war with China, gained 3.5%.

Boosting the index, luxury automaker Ferrari (NYSE: RACE ) RACE.MI surged 7.1% after it forecast 2020 earnings at the top of its previous guidance range as new models such as the hybrid SF90 Stradale start to reach customers. .SXIP , financial services companies .SXFP and construction & materials .SXOP were the other top gainers.

"Even though last minute surprises from the U.S. vote can't be ruled out, I believe European equities are close to a very interesting turnaround point which could mean a more 'structural' return of investor interest towards the region," said Michele Pedroni, portfolio manager at Decalia Asset Management in Geneva.

"Any reversal, however, could be jeopardised should the crisis triggered by the coronavirus pandemic drag on for too long, given that Europe has limited political and economic manoeuvre space to progressively provide support to its economy," he added.

The STOXX 600 shed almost 6% last week as soaring coronavirus cases pushed major economies including France, Germany and the United Kingdom back into partial lockdown, leading economists to cut fourth-quarter economic growth expectations. other individual movers, British homebuilder Crest Nicholson CRST.L surged 16.5% after it reinstated its dividend and said annual earnings would top market expectations. meal-kit delivery company HelloFresh HFGG.DE , which has more than doubled in value this year as lockdowns drove demand, slipped 1.2% after quarterly results.

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