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May 25, 2020, 10:47 a.m. EDT

Bayer, Lufthansa drive gains in Europe amid holiday-thinned trading

German Ifo business sentiment beats forecasts

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By Barbara Kollmeyer, MarketWatch


AFP via Getty Images
Empty chairs are disposed so worshipers can observe social distancing measures on Notre Dame de la Garde Basilica's terrace in Marseille southern France, on May 24, 2020, before the first public mass to be given after France eased lockdown measures taken to curb the spread of the Covid-19 pandemic.

European stocks rose to kick off the week on Monday, with gains led by Deutsche Lufthans AG and Bayer AG, alongside an upbeat business sentiment survey out of Germany.

But trade was thinner trade due to holidays in the U.K. and the U.S.

Extending earlier gains, the Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +0.88%  rose 1.1% to 343.98, after gaining 3.6% last week. That marked the best weekly return since the week ended April 9. The French CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 +1.01%  jumped 1.5% and the FTSE MIB Italy /zigman2/quotes/210598024/delayed IT:I945 +1.34%  gained 1%. U.K. markets will remain closed Monday for a Spring Bank holiday.

Leading regional indexes, the German DAX /zigman2/quotes/210597999/delayed DX:DAX +1.15%  surged 2% on a mix of data and corporate news. German business sentiment came in stronger than expected for May after a “catastrophic few months,” said the Ifo institute. The gradual easing of the lockdown “offers a glimmer of hope” for business, said Clemens Fuest, Ifo president.

Ahead of that data confirmed a 2.2% slowdown in German first-quarter growth, marking the biggest decline since the financial crisis and pushing the economy into a recession. It was followed Later in the morning, German business sentiment rose in May, beating forecasts as business expectations improved considerably, the Ifo Institute said Monday.

Shares of heavily-weighed Bayer AG /zigman2/quotes/210533053/delayed DE:BAYN -0.33%  surged 8% after Bloomberg reported the company has reached deals with 50,000 to 85,000 U.S. cancer lawsuits connected to its weedkiller Roundup. Those sources cited said none of the deals have been signed yet.

Elsewhere, shares of Deutsche Lufthansa AG /zigman2/quotes/205496028/delayed DE:LHA -0.87%  climbed 7% on a report the struggling German airline was close to a bailout deal. Citing sources, Bloomberg reported that the committee in charge of Germany’s WSF Economic Stabilization Fund was expected to meet Monday to discuss a 9 billion-euro ($9.8 billion) rescue package.

Investors shrugged off on mounting tensions between the U.S. and China and rising Hong Kong unrest, as they remain “somewhat optimistic regarding the reopening of businesses across the globe and hope for more monetary and fiscal stimulus,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note to clients.

Hong Kong police fired water cannons and tear gas at protesters in a popular shopping district on Sunday, as thousands mounted street protests against China’s plan to move to push for national security legislation on the city. Signs of fresh tensions in the region are adding to frictions that have been building between the U.S. and China over the coronavirus pandemic.

House national security adviser Robert O’Brien said Sunday that the U.S. will likely sanction China if that legislation goes through. For its part, China has cautioned over strained relations between the two countries.

“We need to be alert to efforts by some political forces in America to hijack China-US relations and who try to push the two countries toward a so-called ‘new Cold War’,” said China’s foreign minister Wang Yi in comments on Sunday, according to reports in the South China Morning Post and elsewhere .

U.S. stock futures joined Europe in the black, with Dow futures /zigman2/quotes/210407078/delayed YM00 +1.60%  climbing over 200 points. Wall Street will remain closed on Monday for the Memorial Day holiday.

In Europe, investors have also been cheered by news that major European countries are slowly reopening from shutdowns. Churches in France reopened for Sunday Mass for the first time in two months, while Spain said it would reopen for international tourists from July and Germany and Italy are also slowly reopening its economy.

Meanwhile, in the U.K., Prime Minister Boris Johnson has come under fire for standing by chief aide Dominic Cummings, who drove 250 miles from London to Durham to his parents house while infected with coronavirus.

Business software group SAP SE /zigman2/quotes/203458330/delayed DE:SAP +0.22%   /zigman2/quotes/207905606/composite SAP +0.54%  was among the heavyweight gainers, up 1.6%.

/zigman2/quotes/210599654/delayed
XX : STOXX
366.83
+3.19 +0.88%
Volume: 0.00
July 10, 2020 11:03p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
4,970.48
+49.47 +1.01%
Volume: 82,357
July 10, 2020 6:05p
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/zigman2/quotes/210598024/delayed
IT : Borsa Italiana
19,767.60
+261.65 +1.34%
Volume: 0.00
July 10, 2020 5:35p
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
12,633.71
+144.25 +1.15%
Volume: 0.00
July 10, 2020 6:30p
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/zigman2/quotes/210533053/delayed
DE : Germany: Frankfurt
63.42
-0.21 -0.33%
Volume: 5,884
July 10, 2020 8:59p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€338,348
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/zigman2/quotes/205496028/delayed
DE : Germany: Frankfurt
8.68
-0.08 -0.87%
Volume: 67,111
July 10, 2020 8:58p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€264,465
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/zigman2/quotes/210407078/delayed
US : U.S.: CBOT
$ 25,980.00
+409.00 +1.60%
Volume: 229,539
July 10, 2020 3:59p
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/zigman2/quotes/203458330/delayed
DE : Germany: Frankfurt
135.20
+0.30 +0.22%
Volume: 5,351
July 10, 2020 8:58p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
N/A
Rev. per Employee
€256,047
loading...
/zigman2/quotes/207905606/composite
US : U.S.: NYSE
$ 153.49
+0.82 +0.54%
Volume: 714,087
July 10, 2020 4:00p
P/E Ratio
38.70
Dividend Yield
0.81%
Market Cap
$181.56 billion
Rev. per Employee
$302,071
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Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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