(Reuters) – European stocks ended higher on Friday, with the benchmark STOXX 600 clocking its third straight week of gains as a jump in commodity-linked stocks helped to counter worries about rising coronavirus cases and an impasse over new U.S. stimulus.
“European markets are gradually gaining ground, with vaccine hopes being counteracted by U.S. stimulus and lockdown fears,” said Joshua Mahony, senior market analyst at IG.
Data from Bank of America showed investors pumped $27 billion into equity funds last week as positive COVID-19 vaccine updates led to euphoric buying of shares in worst-hit sectors such as banks, travel and leisure, and oil.
These sectors were among the top performers this week as investors bet a vaccine will revive economic growth faster, but worries about coronavirus shutdowns took the shine off a rally in these so-called value stocks.
Markets were also nervous about further stimulus for the U.S. economy after Treasury Secretary Steven Mnuchin said key pandemic lending programmes at the Federal Reserve would expire on Dec. 31, putting the outgoing Trump administration at odds with the central bank.
There was optimism on the Brexit front, with an EU official pointing to progress on “important files” as Britain negotiates on a future trading relationship with the European Union.
Reporting by Shashank Nayar and Sruthi Shankar in Bengaluru; Editing by Anil D’Silva and Jane Merriman