CAC 40 INDEX

European Stocks Close Higher on Recovery Hopes; GameStop Jitters Ebb; BP Down 4.5%

NYSE
  • European markets are focused on coronavirus developments and hopes that the EU will soon receive more vaccine supplies.
  • BP reported a weaker-than-expected full-year net loss, its first for a decade, after a tumultuous 12 months for oil and gas.
  • The euro zone economy dropped by 0.7% in the final quarter of 2020 as governments stepped up social restrictions, data showed.

LONDON — European stocks closed higher on Tuesday amid investor optimism for a post-pandemic recovery, while fears over a speculative retail trading frenzy in the U.S. waned.

The pan-European Stoxx 600 ended Tuesday's session up by 1.3%, with travel and leisure shares climbing 3.2% to lead gains as all sectors apart from basic resources and telecoms held in positive territory.

Globally, investors are keeping an eye out on further signs that economic recovery following the coronavirus pandemic is not too far away, as vaccination rollouts continue and new infections and fatalities start to slowly decline amid lockdowns.

On Wall Street, stocks extended gains from the previous session after the equity market kicked off the week with a rebound. Market focus remains on the retail trading mania that has taken place over the last couple of weeks in stocks shorted by hedge funds.

The back-to-back advance coincided with a sharp reversal in GameStop, the video game stock that captivated Wall Street with its massive short squeeze coordinated by a band of retail investors on social media.

GameStop, fresh off a 400% rise last week, slid 30% on Monday and fell another 50% Tuesday. The stock has now lost more than half of its value in two days.

European markets are also focused on coronavirus developments and hopes that the EU will soon receive more vaccine supplies, after several weeks of disappointments and disagreements with vaccine makers.

On the data front, the euro zone economy dropped by 0.7% in the final quarter of 2020 as governments stepped up social restrictions, Eurostat revealed on Tuesday, while a preliminary reading points to an annual GDP contraction of 6.8%.

Earnings remain on the radar, with energy giant BP on Tuesday reporting a weaker-than-expected full-year net loss, its first for a decade, after a tumultuous 12 months for the oil and gas industry. BP shares were down 4.5% by the close.

Siemens Energy swung to a net profit of 99 million euros ($119.53 million) in the first quarter of its fiscal year, the company reported Tuesday. It also announced plans to cut 7,800 jobs by 2025. Shares of the firm were down marginally.

Fresenius Medical Care tumbled 10.3% to the bottom of the Stoxx 600 after cutting its profit guidance, taking major shareholder Fresenius down 3.1%.

At the top of the European blue chip index, Danish health devices firm Coloplast climbed 8.8%.

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- CNBC.com staff contributed to this market report.

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