European Stocks Rise, Ending Worst Seven-Day Selloff Since 2016

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Un trader sorridente alla Borsa di Francoforte. REUTERS/Ralph Orlowski

Equities widened rally as U.S. peers rose for second day
Citi says 6.9% selloff over seven days opens good entry point

European stocks advanced for the first time in eight days after the biggest rout since the Brexit vote erased the 2018 advance for most of the region’s benchmarks.

The Stoxx 600 Index rose 2 percent at the close, the biggest jump in nine months. All industry groups ended the session in the green, as financial services stocks led the advance with a 3.4 percent gain. Stocks in France and Germany rallied at least 1.6 percent, while the euro slid for the second time this week.

European equities widened their gains on Wednesday after peers in the U.S. opened higher as investors looked past concerns that a strong economy may accelerate the removal of monetary stimulus. Fundamentals in the region’s equities remain intact and a 6.9 percent selloff from last week through Tuesday presented a good entry point, Citigroup equity strategists including Jonathan Stubbs said in a note Wednesday.

“The selloff was too brutal and fast,” said Andrea Tueni, head of sales trading at Saxo Banque in France. “There is a necessity for the investors to reprice the inflation risk and it consequences.”

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