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European stocks rebound after biggest rout since March
MARKETWATCH 7:43 AM ET 6/12/2020
European stocks traded higher on Friday, as investors waded back into markets after the worst session since March, which was driven by losses on Wall Street and concerns over rising coronavirus outbreaks in the U.S.

The Stoxx Europe 600 index rose 1% to 356.84, after falling 4% on Thursday for its biggest one-day percentage decline since March 23. A gain on Friday would break a string of losses that have stretched for four straight sessions.

Concerns that the market has risen too far, too fast have been growing among investors, and Thursday's action may intensify the debate over whether a correction is looming. The Stoxx 600 remains 26% above a March 18 closing low of 279.66. The German DAX rose 0.9% and the French CAC 40 index climbed 1.7%.

The FTSE 100 rose 1%. Earlier in the day, U.K. data showed gross domestic product collapsed by a record 20.4% in April, amid the country's pandemic lockdown and health crisis.

Wall Street was ready to rebound as well. Dow futures jumped over 500 points after Thursday's crushing loss (http:// www.marketwatch.com/story/dow-futures-tumble-550-points-as-stock-market-investors-watch-rising-cases-of-coronavirus-fed- offers-grim-outlook-of-us-economy-2020-06-11) of 1,861.82 points, or 6.9% -- the biggest one-day fall since mid-March. Bullish investors were unsettled by a grim economic outlook from the Federal Reserve and rising coronavirus cases in 20 states, coming just as the U.S. economy is trying to get back on its feet.

"Yesterday's selloff was so sudden and large that it could trigger a widening unease about the quality of the recent market rise, given the enthusiastic participation of novice traders on the way up and signs of speculative froth in low quality equities names," said Saxo Bank's chief economist and chief investment officer, Steen Jakobsen, in a note to clients.

"This is not a prediction, but a warning of heightened risk that only goes away if volatility quickly drops back lower," Jakobsen added.

Automobile shares, airline and travel stocks and some energy companies were among the gainers, with shares of Carnival (CCL.LN) up 9%, Peugeot (UG.FR) gained 6%, easyJet (EZJ.LN) rose nearly 6% and Royal Dutch Shell (RDSA.LN) gained 3%, with Total (FP.FR) (FP.FR) up 2.5%.

Among stocks on the move, shares of Games Workshop Group (GAW.LN) rose 8% after the U.K. videogame publisher and developer said "recovery since reopening has been better than expected."

Shares of Pearson (PSON.LN) jumped 12% after a regulatory filing on Thursday revealed activist investment firm Cevian Capital has built a stake in the U.K.-based education company (http://www.marketwatch.com/story/activist-cevian-capital- builds-54-pearson-stake-2020-06-12).

Informa (INF.LN) rose 6% after the U.K. events and academic-publishing group said its outlook was uncertain due to the pandemic (http://www.marketwatch.com/story/informa-says-outlook-uncertain-but-can-cut-costs-2020-06-12), but it had identified cost savings of at least GBP400 million. The company also said it expects major events in mainland China to return.

-Barbara Kollmeyer; 415-439-6400; [e-mail]


(END) Dow Jones Newswires
06-12-200743ET
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