UPDATE 2-European stocks pause after rally, ECB stimulus boosts banks

  • Reuters
  • Stock Market News
UPDATE 2-European stocks pause after rally, ECB stimulus boosts banks

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

* Eurozone banks among few gainers after ECB move

* German autos drop as stimulus favours electric cars

* Spirits maker Remy Cointreau jumps on forecast raise

* Adidas sees faster recovery in greater China

(Updates with ECB details, market move)

By Sruthi Shankar

June 4 (Reuters) - A strong rally this week in European stocks stalled on Thursday as investors locked in profits, although euro zone banks surged after the European Central Bank ramped up its stimulus programme to prop up the coronavirus-hit economy.

The euro zone stock index .STOXXE closed 0.2% lower after falling as much as 0.8% earlier in the session, but the bloc's lenders .SX7E gained 1.1%.

The ECB said it would increase the size of emergency bond buying by a wider-than-expected 600 billion euros ($674 billion) to 1.35 trillion euros and that the purchases would run until the end of June 2021, six month longer than originally planned. index of Italian banks .FTIT8300 jumped 1.1%, while Spanish lenders BBVA BBVA.MC and Banco Santander SAN.MC gained nearly 1.7%.

However, the pan-European STOXX 600 .STOXX fell 0.7%, led by declines in automakers .SXAP , utilities .SX6P and healthcare stocks .SXDP .

"Monday, Tuesday and Wednesday were a great run with the expectation of additional easing," said David Madden, market analyst at CMC (NS: CMC ) Markets."We got that and now it seems that traders are taking the money off the table for now."

Equity markets have bounced strongly this week, with Wall Street's tech-heavy Nasdaq .IXIC hovering below record levels, on signs of recovery from a coronavirus-forced recession, optimism over a vaccine and hopes of more stimulus.

Germany's coalition parties agreed a 130-billion-euros stimulus package to speed recovery on Wednesday, but shares in Daimler DAIGn.DE and Volkswagen VOWG_p.DE fell between 1% and 2.5% as the measures favoured electric cars. unveiled a staggered tax on vehicles emitting large amounts of carbon dioxide (CO2), hitting sports utility vehicles. Shares of car parts suppliers such as Continental CONG.DE and Valeo VLOF.PA were down 2.9% and 4%.

Airbus AIR.PA jumped 5.2% after a report said it was looking to hold underlying jet output at 40% below pre-pandemic plans for two years, an approach which adds new pressure to cut thousands of jobs. spirits company Remy Cointreau RCOP.PA surged 11.3% after it predicted a strong recovery in the second half, driven by China and the United States. sportswear firm Adidas ADSGn.DE gained 1.8% as it said sales had returned to growth in greater China faster than it had expected after the coronavirus lockdown. = 0.8925 euros)

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