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European stocks hover around all-time highs, banks lead gains

For Sruthi Shankar and Shreyashi Sanyal

Mar 30 (Reuters) – European stocks closed near record highs on Tuesday on hopes of a vaccine-driven economic recovery, as investors looked beyond the aftermath of a U.S. hedge fund debacle that hit U.S. bank actions a day before.

* The pan-European STOXX 600 Index rose 0.7%, trading less than 1% from its pre-pandemic high.

* Bank stocks gained 2.7%, rebounding after a 1% drop on Monday, as yields on US Treasuries and Europeans advanced in hopes of higher economic growth and inflation in the future.

* Swiss lender Credit Suisse fell 3.1%, after plummeting close to 14% the day before, as it warned of “highly significant and material” losses after the fund, named by sources as Archegos Capital, breaches the guarantees for its operations, the so-called “margin calls”.

* “Although Archegos uncertainties still hang over the markets, European investors felt calm enough to boost indices in the region,” Connor Campbell, financial analyst at SpreadEx, said in a note.

* German benchmark DAX gained 1.3% to hit a record high, underpinned by automakers and a 1.6% advance at Deutsche Bank. “If all goes well in the next 48 hours, (the DAX) could close March above 15,000 points,” Campbell said.

* The benchmark STOXX 600 is on track to end the first quarter with a gain of close to 8%, its fourth consecutive quarterly increase, as optimism about global growth overshadowed slow Eurozone vaccination campaigns and new lockdowns due to to the coronavirus.

* Economically sensitive cyclical stocks such as automobiles, banks, and travel and leisure performed the best this quarter as investors bought cheap paper in the hope that the reopening of economies will stimulate growth in those sectors.

* While defensive ones like utilities and healthcare fell, while rising returns weighed on tech stocks.

(Report by Sruthi Shankar and Shreyashi Sanyal in Bengaluru, edited in Spanish by Manuel Farías)

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