UPDATE 2-Banks steal spotlight, help European shares erase loses

  • Reuters
  • Stock Market News
UPDATE 2-Banks steal spotlight, help European shares erase loses
Credit: © Reuters.

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

* Banks hit three-week high as yields rise

* UK midcap stocks surge as Brexit hopes grow

* Logitech slides as Apple removes rival products

(Updates to market close)

By Sruthi Shankar

Oct 6 (Reuters) - European stocks stretched their gains for a fourth session on Tuesday, with banks surging more than 3% over growing hopes for a U.S. stimulus package, a Brexit trade deal as well as upbeat German data.

After shedding as much as 0.5% at one point, the pan-European STOXX 600 index .STOXX gradually erased the losses to close 0.1% higher.

Europe's banking index .SX7P hit its highest level in almost three weeks, as rising U.S. Treasury yields - a benchmark for global borrowing costs - hit multi-month highs, supporting lenders on both sides of the Atlantic. US/

Aside from banks, sectors considered more exposed to the economic cycle, namely travel & leisure .SXTP , oil & gas .SXEP , automakers .SXAP and insurers .SXIP , rose between 1% and 2.9%.

Global markets saw a relief rally on Monday on reassurances about U.S. President Donald Trump's improving health after he tested positive for COVID-19 last week, as well as political progress towards more fiscal stimulus measures. markets have been dominated by indecision this week, with the U.S. indices following their European counterparts in what looks like a distinct end to the 'Trump left hospital' bounce," wrote IG's Joshua Mahony.

Technology .SX8P and healthcare stocks .SXDP , among the top performers in Europe this year, slid about 0.9%, weighing on the STOXX 600.

Wall Street technology majors also came under pressure after news that the U.S. House of Representatives' antitrust report on Big Tech firms contained a "thinly veiled call to break up" the companies. DAX .GDAXI jumped 0.6% as data showed orders for German-made goods rose 4.5% in August, more than expected, boosting hopes for a robust third quarter in Europe's largest economy after the coronavirus shock. midcap index .FTMC , composed of stocks exposed to the UK economy, jumped 1.2% after sources told Reuters that Britain and the EU were close to agreement on reciprocal social security rights for their citizens after Brexit. PUMG.DE slid 1.1% after French luxury group Kering PRTP.PA said it had completed the sale of a 5.9% stake in the German sportswear group. technology accessories maker Logitech LOGN.S fell 5.1% after Apple AAPL.O stopped selling headphones and wireless speakers from rivals. waste and water firm Suez SEVI.PA jumped 4.6% after rival Veolia VIE.PA succeeded in buying a large stake in the company from power group Engie ENGIE.PA .

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