European Stocks Rise as Banks Exceed Forecast for TLTRO Loans

Financial companies helped European stocks rise higher as lenders borrowed more than double what was forecast under the European Central Bank’s TLTRO program.

The Stoxx Europe 600 Index rallied 0.9 percent at the close, ending a three-day streak of losses. The banks sector rose 0.8 percent. Lenders were allotted 233.5 billion euros in final round of Targeted Longer-Term Refinancing Operations, the ECB said. Travel and leisure stocks rose the most since December, led by GVC Holdings Plc, which reported a stronger-than-expected increase in 2016 earnings and said it’s made a good start to 2017.

With U.S. stocks earlier this week experiencing their first pullback in more than four months, investors are increasingly comparing them to alternatives in Europe. The Stoxx 600 trades more cheaply, at about 1.8 times book value, and 15 times estimated earnings. “What the market is not pricing is a potential positive outcome of German and French elections,” Christian Keller, head of economics research at Barclays, said by phone. “This scenario isn’t priced in, but if this happens, you can see the market becoming more optimistic about some unfinished projects in Europe. Polls have shows that a chance of Le Pen victory in France is limited. ”

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