(Reuters) - European stocks rose on Wednesday, as positive developments regarding a potential COVID-19 treatment bolstered a rally in banks and oil stocks and shares in sensor specialist AMS jumped on upbeat earnings.
Global sentiment got a boost after U.S. drugmaker Gilead Sciences said its experimental antiviral drug remdesivir helped improve symptoms for COVID-19 patients who were given the drug early.[.N]
“Risk appetite is roaring back on news that... remdesivir met the primary endpoint,” said Edward Moya, senior market analyst at OANDA, New York.
“But traders need to exercise some caution as (the drug) has yet to be proven safe nor effective in treating COVID-19.”
The pan-European STOXX 600 closed up 1.8% with, shares of Airbus surging 10% even as its quarterly profits plunged. The planemaker’s shares hit session highs after U.S. rival Boeing also reported quarterly losses.
Oil giants BP, Total and Royal Dutch Sell advanced more than 3% each as crude prices climbed on the back of a lower-than-expected rise in U.S. stockpiles.
Automakers were buoyed after German carmaker Daimler forecast operating profit at its Mercedes-Benz Cars & Vans division rising in 2020, and rival Volkswagen said it expected to be profitable on a full-year basis.
German shares surged almost 3%.
Barclays and Asia-focused Standard Chartered drove a rally in banks. StanChart expects its main markets to lead global economic recovery from the COVID-19 crisis as early as later this year, while a Barclays’ investment bank cushioned the blow for the British bank.
Topping the STOXX 600 was sensor specialist AMS, up 24.4% after saying it expected the impact from the coronavirus in the second quarter to be limited.
European shares have recouped nearly half of their losses since the February rout as many countries move to restart their economies following weeks-long lockdowns to curb the spread of the coronavirus.
With global economic activity nearly halted in April analysts are, however, predicting a sharper slump in second-quarter earnings. Latest data from Refinitiv pointed to a 40.4% decline in profits during the period for companies listed on the STOXX 600 versus 37% a week ago.
Healthcare stocks - a defensive sector that typically holds steady in the wake of the health crisis - fell 1.6%.
Banks drove Italy's stocks benchmark up 2.2%, helping it shrug off rating agency Fitch downgrading the country's credit rating to just one notch above junk.
Wirecard shares continued to slide after a prominent short seller demanded the sacking of CEO Markus Braun following a special audit of the German payments company that was unable to verify its financial statements.
All eyes will be on the release of the U.S. Federal Reserve’s statement later in the day. Expectations are also high for more stimulus from the European Central Bank, which is due to meet on Thursday.
Reporting by Sruthi Shankar in Bengaluru; Editing by Saumyadeb Chakrabarty, Sriraj Kalluvila and Alex Richardson