(Reuters) – European shares ground higher on Thursday, buoyed by gains among bank and travel stocks, with risk appetite aided by a European Central Bank official expressing willingness to support the euro zone.

French central bank head Francois Villeroy de Galhau said that the euro zone was not in the situation of Japan and that the ECB was “not short of ammunition” to accelerate price growth and buoy the economy.

The pan-European STOXX 600 index edged up 0.1 percent, with Paris-traded shares rising 0.7 percent as luxury stocks gained significantly.

LVMH’s shares rose 4.6 percent to a record closing high after the Louis Vuitton owner posted strong first-quarter sales.

Villeroy’s comments reassured the market and helped investor sentiment as they showed “the institution is willing to give the region assistance, if needed,” David Madden, market analyst at CMC Markets UK, wrote in a note.

Banks, down 0.3 percent on Wednesday following ECB comments which failed to impress investors, more than recovered with a 1.3 percent gain.

Commerzbank rose 3.1 percent with its supervisory board chairman dismissed reports of board dissatisfaction with its chief executive as irresponsible and unfounded. He also said the bank “must explore” the option to merge with Deutsche Bank, which gained 2.9 percent.

Airline stocks zoomed, with the travel and leisure index rising 1.3 percent, after a six-month Brexit extension.

The delay temporarily lifted some uncertainty hanging over the firms, who are expected to bear the brunt of fewer British holiday-makers traveling to Europe if a hard Brexit comes to pass.

EasyJet soared 8.4 percent, while Deutsche Lufthansa jumped 3.1 percent.

Irish stocks, which are especially sensitive to the fallout from a potential hard Brexit, tacked on 0.6 percent.

Airline Ryanair Holdings jumped 5.1 percent in its best performance in seven and a half months.

Basic resources stocks had a torrid day, ending 1.4 percent lower, with a slide in copper prices on worries about a global slowdown in the backdrop.

Glencore dropped 2.7 percent after Goldman Sachs downgraded its rating on the commodity trader’s stock to “Neutral” from “Buy” and sliced its price target.

A 0.9 percent drop in oil prices pulled oil and gas stocks 0.7 percent lower.

ASML dropped 0.8 percent. The Dutch firm said it had been the victim of corporate espionage in 2015 involving employees from countries including China.

Utilities were dragged 0.9 percent lower, with Engie down 1.7 percent after Morgan Stanley downgraded it to “equal-weight” from “overweight”.

Prysmian tumbled 8.2 percent after the Italian cable maker said it would review its financial results for last year.

Source: Read Full Article