UPDATE 2-European shares at record high on China tariff cut plans, robust bank results

  • Reuters
  • Stock Market News
UPDATE 2-European shares at record high on China tariff cut plans, robust bank results
Credit: © Reuters.

(For a live blog on European stocks, type LIVE/ in an Eikon news window)

* Bank subindex best performer in the region

* Italian shares at highest since May 2018 on Unicredit

* STOXX 600 set for best week since Dec 2016

* Energy stocks fall as oil prices decline, Total bucks on Q4 beat (Updates to close)

By Susan Mathew

Feb 6 (Reuters) - Euro zone banks led European shares to new highs on Thursday amid a broader rally in global stocks prompted by China's move to halve additional tariffs on some U.S. goods.

The pan-European STOXX 600 index .STOXX extended gains to a fourth session and closed up 0.4% at 425.49 - an all-time high - but retreated slightly from 426.70 hit earlier in the session as a decline in oil prices weighed on energy majors .SXEP . O/R

Beijing said it would lower extra levies imposed last year on 1,717 U.S. products, weeks after the signing of a Phase 1 trade deal that brought a truce to a bruising trade war between the world's two largest economies. basic resources .SXPP and technology .SXAP sub-sectors in Europe rose about 0.7% and 0.5%, respectively.

Beijing's decision also brewed some optimism over lessening the economic shock from a coronavirus outbreak that has killed over 500 people and caused widespread disruptions to China's economy.

Lenders Unicredit CRDI.MI , DNB DNB.OL and Nordea Bank NDASE.ST all rallied more than 6% after reporting strong quarters. Germany's Deutsche Bank DBKGn.DE posted its best day in more than eight years after revealing that a new shareholder, Los Angeles-based Capital Group, took a 3.1% stake in the company. this saw the euro zone banks index .SX7E post its biggest daily gain in a month. Italy's bank-heavy MIB .FTMIB jumped 1% to close its highest in nearly two years with Fiat Chrysler's FCHA.MI 0.8% rise adding to the rise.

Drugmaker Sanofi SASY.PA was the biggest boost to STOXX 600 as well as the main index in Paris .FCHI after it forecast further profit growth for 2020. Oil major Total's TOTF.PA 1% rise on beating quarterly results also lifted French stocks.

Worries over coronavirus shaved 3% off the STOXX 600 last week, but the benchmark is now on pace to log its biggest weekly gains since December 2016.

Ingo Schachel, head of equity research at Commerzbank (DE: CBKG ), highlighted a strong rebound in cyclical shares .SCYC .

"It's still a tough time for cyclicals but some of the bellwethers like ArcelorMittal have surprised markets with reasonably good numbers."

The steelmaker MT.AS soared 11% after reporting a bigger-than-expected annual profit and its lowest-ever level of debt. shares .SSMI also scaled new highs on Thursday, with telecom firm Swisscom SCMN.S in the lead after reporting a near 10% rise in full-year income.

But not all earnings shone as brightly. Swedish security companies Securitas SECUb.ST and Assa Abloy ASSAb.ST slipped after reporting a slowdown in organic sales growth.

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