European Stocks Gain Traction Amid Relief Rally as Hurricane Irma Weakens

European equity benchmarks climbed on Monday as risk appetite returned on expectations that the overall damage caused by Hurricane Irma may be less than initially estimated.

Irma was downgraded to a category 1 storm as it moved over the western Florida peninsula, CNN reported on Monday, citing the National Hurricane Center. The hurricane left nearly four million people without power as it swept through southwest Florida and while it has weakened, its strong winds and flooding still pose a risk, CNN said.

“Investors are feeling somewhat relieved today after the most dire predictions in terms of a disaster caused by Hurricane Irma have evaporated,” Naeem Aslam, chief market analyst at Think Markets, said by e-mail. “The damage caused by Hurricane Irma is still colossal as streets have been changed into rivers. However, thankfully, the overall impact of Irma is falling short of predictions.”

The pan-European STOXX 600 index gained 0.8%, rising for a fourth session, with all sectors trading in positive territory. Insurance companies and retailers led the gains. Hannover Re gained 4.5% after saying in a statement on Monday that it was “well on track” to achieve its 2017 year-end targets, even as the market environment in worldwide property and casualty reinsurance remains challenging and competition remains intense. Rival Muenchener Re gained 4.2% in Frankfurt. Allianz, a financial services firm with an insurance arm, gained 1.6%.

Swedish fashion retailer H&M, rose 3% in Stockholm after getting a rating upgrade from Credit Suisse to “outperform” from “under-perform”, CNBC said. Primark owner Associated British Foods fell 2.1% in London after releasing a trading update even as it raised its full-year profit outlook. Lender Provident Financial gained 2.6% and drugmaker Astrazeneca rose 1.8%.

And, in Paris, media conglomerate Vivendi, insurer AXA and lender Credit Agricole each rose 1.9%.

The euro-region blue-chip STOXX 50 index jumped 1.2% and the DAX in Frankfurt rose 1.1%. The FTSE 100 in London added 0.6% and the CAC 40 in Paris rose 1.2% at the time of writing.

By Patrick Maguire