European shares near three-month high; Lufthansa lifts Germany

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 5, 2020. REUTERS/Staff

(Reuters) – European shares inched closer to a three-month high on Tuesday on optimism around a post-coronavirus economic recovery, with German stocks buoyed by a jump for Lufthansa.

The pan-European STOXX 600 rose 1% in early deals to hit its highest level since March 9.

Lufthansa (LHAG.DE) surged 7.5% as its supervisory board approved a 9 billion euro ($10 billion) government bailout for the airline, driving Frankfurt-listed shares .GDAXI up 2.6% to its peak since March 5.

With traders in Germany returning from a long weekend, Volkswagen (VOWG_p.DE), Daimler (DAIGn.DE) and BMW (BMWG.DE) gained between 4.5% and 7.7% on a Reuters report on Sunday that the country’s Ministry of Economics had proposed a 5 billion euro buyer bonus scheme to boost car sales.

Norway’s Seadrill SDRL.OL slid 9.3% as it announced a writedown of $1.2 billion on the value of its oil drilling rigs and warned it may have to convert a part of its $7.4 billion in debt into equity to survive.

Gains across the other markets were tempered by simmering U.S.-China tensions, with Wall Street futures coming under pressure as President Donald Trump vowed to use the military to halt protests over the death of a black man in police custody.

Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur

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