UPDATE 2-European stocks hit six-month high as automakers, insurers gain

  • Reuters
  • Stock Market News
UPDATE 2-European stocks hit six-month high as automakers, insurers gain
Credit: © Reuters.

* STOXX 600 near 6-month peak hit earlier in session

* Exporter stocks in London push FTSE 100 to 6-month closing high (Updates to close)

By Aaron Saldanha

April 2 (Reuters) - European shares hit their highest in half a year on Tuesday, buoyed by autos and insurance stocks and gains among export-heavy London stocks as Brexit uncertainty weakened the pound.

The pan-European STOXX 600 index .STOXX gained for a third straight day, hitting 385.68 - its highest since late September. It later gave up some gains, but ended up 0.4 percent.

"The resurgence in risk appetite looks to have legs, supported by stronger (or at least less bad) economic data, and any short-term weakness should probably be resolved in favour of the bulls in due course," Chris Beauchamp, chief market analyst at IG, wrote in a note.

The index of automakers and parts suppliers .SXAP rose 1.3 percent, building on Monday's 3.3 percent gain which came after unexpectedly strong Chinese factory data. auto parts supplier Continental AG CONG.DE climbed 2.3 percent, and said it was sticking to plans list its powertrain division. Pirelli PIRC.MI rose 2.9 percent after the Italian firm said it saw a 107 million euros first-half boost from Brazilian tax credits. insurers .SXIP gained 0.9 percent, propped up by London-listed names such as Prudential PLC PRU.L and Old Mutual Ltd OMU.L , which both rose at least 2.9 percent.

The pound slid as Britain moved towards potentially leaving the European Union on April 12 without a orderly withdrawal deal or alternatively perhaps an election, pushing up stocks of UK firms with significant overseas earnings. GBP/ .L

The FTSE 100 .FTSE climbed 1 percent to finish at a six month-closing high.

"The FTSE has been the big outperformer today, as fears over a no-deal Brexit drag the pound lower," Joshua Mahony, Senior Market Analyst at IG, wrote in a note.

European banks .SX7P rose 0.7 percent, with Swedbank AB SWEDa.ST jumping 6.1 percent in its best one-day showing in more than six years.

The Swedish lender's stock has bounced back almost 10 percent this week after hitting a more than six year low on Friday on its alleged involvement in a money laundering scandal that led to the departure of its chief executive. resources stocks .SXPP rose 0.3 percent for a sixth straight session of gains.

But telecom stocks .SXKP dipped 0.2 percent.

News of Singapore Airlines SIAL.SI grounding two Boeing (NYSE: BA ) BA.N 787-10 jets fitted with Rolls-Royce Trent 1000 TEN engines after checks found premature blade deterioration sent the British car-to-aircraft engine maker's shares RR.L down 1.1 percent. Air Holdings WIZZ.L climbed 4.8 percent after the low-cost airline forecast full-year profit in the upper half of target range, contrasting with Monday's gloomy update from easyJet PLC EZJ.L . AG NOVN.S shares fell 1.2 percent after a U.S. ruling that the Swiss drugmaker must face a government lawsuit accusing it of paying millions of dollars in kickbacks to doctors so they would prescribe its drugs.

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