European shares tread water after rallying on stimulus hopes

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, October 2, 2020. REUTERS/Staff

(Reuters) – European shares hovered at five-week highs on Tuesday following a three-day rally that was sparked by hopes of more U.S. stimulus, while Airbus slipped after JPMorgan downgraded its rating on the stock.

The pan-European STOXX 600 .STOXX was flat at 0704 GMT, with gains for utilities .SX6P, real estate .SX86P and telecoms .SXKP stocks offset by declines in the travel and leisure .SXTP and autos .SXAP sectors.

The benchmark index on Monday ended at its highest level in nearly a month as investors held out for Washington to agree on fresh federal aid and as data pointed at a stable recovery in the world’s second biggest economy, China.

New figures on Tuesday showed China’s imports in September grew at their fastest pace this year, while exports extended strong gains.

In company news, Airbus SE AIR.PA fell 3.5% as JPMorgan cuts its rating on the planemaker’s stock to “underweight” from “neutral”.

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