June 25, 2020 / 7:39 AM / 14 days ago

European stocks end higher as mood improves, Lufthansa jumps

(Reuters) - European stocks closed higher on Thursday, as improving economic data and more support from the European Central Bank helped lift sentiment, while shares in Germany’s Lufthansa jumped after a top shareholder backed a government bailout.

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 23, 2020. REUTERS/Staff

The pan-European STOXX 600 closed up 0.7% after a choppy session with automakers .SXAP, financial services .SXFP, banks .SX7P and insurers .SXIP the top gainers, rising between 1.6% and 2.4%.

Stocks picked up steam after the ECB said it would offer euro loans against collateral to central banks outside the euro area to backstop funding markets amid the coronavirus pandemic.

“The ECB took a fresh initiative today that caught the market by surprise and is helping lift financial shares today,” said Marc Chandler at Bannockburn Global Forex.

Lufthansa (LHAG.DE) jumped 7.1% after billionaire investor Heinz Hermann Thiele dropped his objections to a 9 billion euro ($10 billion) government bailout of the airline.

Meanwhile, in a first for a constituent of Germany's prestigious DAX .GDAXI, payments firm Wirecard (WDIG.DE) collapsed owing creditors almost $4 billion after disclosing a gaping hole in its books. Its shares slumped 71.3%.

The auto-heavy German index gained 0.7% overall, boosted by Daimler (DAIGn.DE), Volkswagen (VOWG_p.DE) and BMW (BMWG.DE).

After upbeat euro zone business activity readings for June earlier this week, a gauge of German consumer morale improved heading into July, raising hopes for an steady recovery from the coronavirus crisis.

However, surging COVID-19 cases in the United States, prospects of a fresh EU-U.S. trade tussle and a worrying forecast for global economy put the STOXX 600 on track for weekly losses.

Budget airline easyJet (EZJ.L) was down 9.5% after raising about 419 million pounds ($520 million) through a share placement to help bolster its finances.

Sanofi (SASY.PA) edged up 0.9% after Reuters reported the drugmaker is considering cutting hundreds of jobs.

Bayer AG (BAYGn.DE) ended down 2.9%, reversing earlier gains, after agreeing to pay as much as $10.9 billion to settle U.S. lawsuits claiming that its widely used weedkiller Roundup caused cancer.

Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva, Kirsten Donovan

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