European stocks eked out gains by the closing bell on Monday evening after automakers resumed their rally, while banks fell after a slump in Turkey‘s currency.
In addition, worries lingered about more restrictions due to rising coronavirus cases on the continent.
The Turkish lira plunged to a near record low after President Tayyip Erdogan replaced a hawkish central bank governor with a critic of high interest rates over the weekend.
Euro zone banks exposed to the country such as Spain’s BBVA , Italy’s UniCredit, France’s BNP Paribas and Dutch bank ING fell between 0.8% and 7%.
However, the mood had improved by the end of the day with the pan-European STOXX 600 rising to 0.2%, reversing declines from earlier in the session. And with automobile stocks rising for a fifth day in the past six sessions.
Porsche jumped 8.9% on contagion from a buying frenzy that has been lifting Volkswagen shares after the German car maker unveiled plans to challenge Tesla in the e-car market.
Deutsche Bank raised its target prices on Porsche, which holds the majority of Volkswagen ordinary shares, following a target rise for VW.
“Volkswagen is doing a good job on cost cuts which, together with a re-acceleration of the cycle and visibility on electric vehicles, make current valuations interesting in the medium to long term,” said Michele Pedroni, fund manager at Decalia.
“A possible spin-off, especially of Porsche, could only generate additional value,” he added.
Moreover, European stocks had seen sharp falls on Friday, easing from a one-year peak as renewed lockdowns in France and concerns over the pace of vaccination drives hit sentiment, with the European Union threatening to block exports of COVID-19 vaccines to Britain.
A British minister warned on Monday that Britons should wait before booking summer holidays abroad, pointing to rising COVID-19 infection rates in Europe.
British Airways-owner IAG, Lufthansa and Ryanair Holdings and travel company TUI fell between 2.2% and 4.5%.
The wider travel & leisure sector fell 0.7%, with Germany set to extend a lockdown to contain the COVID-19 pandemic into its fifth month.
(Reuters)
