European stocks gain 12% in quarter despite Covid-19 economic toll

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 5, 2020. REUTERS/Staff

European stocks slipped in the latest session but ended strongly in the quarter after mounting a recovery despite the hit from the Covid-19 economic crisis. 

The pan-European Stoxx 600 index looked set to post a more than 12% rise in the quarter - its best since March 2019 - as unprecedented stimulus, hopes of a Covid-19 vaccine, and relatively fewer virus cases in Europe powered a rebound from March lows.

Still, the index is down 13.6% for the year.

Asian stocks gained after data showed China's factory activity expanded at a stronger pace in June as the government lifted lockdowns and stepped up investment, helping the exporter-heavy German Dax index rise in early trade.

In the latest session, “the biggest quarterly drop in UK GDP in more than a generation helped contribute to a downbeat feel for the markets,” said AJ Bell investment director Russ Mould.

“Combined with the warning from the World Health Organisation that the worst of the coronavirus pandemic was yet to come, it’s easy to see why investors would be feeling nervous,” he said.  

UK's Ftse-100 underperformed as data showed Britain's economy shrank by the most since 1979 in the first quarter of 2020 as households slashed their spending.

Also weighing on the Ftse index, Shell fell over 2% after saying it would write down the value of its assets. Reuters