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* STOXX 600 notches strongest close since March 6
* May PMIs for euro zone better than expected
* ECB expected to expand bond buying on Thurs meeting
(Updates to market close)
By Sruthi Shankar
June 3 (Reuters) - European shares rallied on Wednesday,
with insurers jumping after France's AXA said it would pay a
dividend, while improving global data spurred bets of faster
economic recovery from the coronavirus crisis.
The pan-European STOXX 600 .STOXX rose 2.5% to close at
its highest since March 6, with Germany's DAX .GDAXI outpacing
the rest of Europe with a 3.9% gain.
The German index recorded its strongest close since Feb 27,
and is just 9.5% below its all-time high.
European markets have performed strongly so far this week as
several countries eased strict lockdown measures, while hopes of
more stimulus and encouraging developments on a potential
COVID-19 treatment have helped the STOXX 6000 recover more than
37% from March lows.
"When (the slump) happened, there was not a fundamental
issue in the economy. It was all down to a single event and
there's no reason why we can't come back very strongly," said
Randeep Somel, associate portfolio manager at M&G Investments.
China's services sector returned to growth in May, a survey
showed, while data from the euro zone suggested the worst of the
pandemic's economic impact was over. The European Central Bank meets on Thursday and is expected
to increase its bond purchases by 500 billion euros.
"While economists broadly agree the ECB will meet market
expectations, it would not be out of the realm of possibility...
to delay the increase - given that its current program is far
from depleted," Cantor Fitzgerald analysts wrote in a note.
Insurers .SXIP , automakers .SXAP , banks .SX7P and
travel & leisure .SXTP stocks led the gains, up between 3.8%
and 6.8%, as investors found value in beaten-up cyclical
sectors.
AXA AXAF.PA jumped 10.4% after saying it would pay a 2019
dividend to shareholders and shares in Allianz ALVG.DE ,
Prudential PRU.L and Generali GASI.MI also rose between 7.8%
and 8.5%.
Renault SA RENA.PA surged 10.5% after it finalised a 5
billion euro ($5.60 billion) loan from the French government and
Goldman Sachs upgraded its stock to "buy". Shares in Infineon technologies IFXGn.DE , AMS AMS.VI and
ASM International ASMI.AS rose between 3.8% and 7.3% after
U.S. chipmaker Microchip MCHP.O raised its earnings forecast.
Lufthansa LHAG.DE gained 7.7% as it vowed to step up
restructuring measures after posting a first-quarter net loss of
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EU Stocks Recovery https://tmsnrt.rs/3duq3dp
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