European shares set for weekly gains as travel stocks soar

European stocks were on track for weekly gains on Friday as news that Britain was mulling easing travel restrictions boosted airlines and hotel groups, while a rebound in luxury stocks also supported the main indexes. The pan-European STOXX 600 index rose 0.5%, reversing losses earlier this week on worries about slowing global growth and tighter regulation of Chinese firms.

European stocks were on track for weekly gains on Friday as news that Britain was mulling easing travel restrictions boosted airlines and hotel groups, while a rebound in luxury stocks also supported the main indexes.

The pan-European STOXX 600 index rose 0.5%, reversing losses earlier this week on worries about slowing global growth and tighter regulation of Chinese firms. After closing up 3.4% on Thursday in one of the best single-day performances this year, the European travel and leisure index added 1.1%.

Wizz Air, British Airways-owner IAG, and InterContinental Hotels rose between 0.5% and 4.0% after Britain considered easing its COVID-19 rules for international travel. "The one area that has surprised and continues to surprise is Europe. We've U.S. and China where data look like they're slowing a little bit," said Adam Mac Nulty, portfolio manager at Brandes Investment Partners.

"Next year, we're looking at high single-digit EPS growth in Europe and for a market that is trading at mid-teen multiples, we think that is attractive." China-exposed luxury stocks such as LVMH, Kering, Hermes, and Richemont rebounded, following sharp losses earlier this week on fears of fresh coronavirus-related restrictions and regulatory moves in China.

France's CAC 40 and Spain's IBEX outperformed regional peers with a 1.0% and 1.2% gain, respectively. While European stock markets looked set to end the week on a steady footing, next week could be pivotal in determining near-term market direction, with the U.S. Federal Reserve and the Bank of England's policy meetings, as well as German elections on deck.

Germany's Commerzbank climbed 4.4% after a Handelsblatt report said U.S. investor Cerberus was considering taking a 15.6% state in the bank after the federal election. Miners took a hit, with Anglo American tumbling 3.8% after Morgan Stanley and UBS downgraded the stock. Worries about slowing Chinese growth put the European mining index on course for a 5% weekly decline.

Investors also largely looked past data that showed British retail sales unexpectedly fell again in August in what is now a record streak of monthly declines.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)