European shares gain on hopes of easing in lockdown measures

(Reuters) – European stock markets edged higher on Wednesday as Italy looked set to relax sweeping restrictions to contain the coronavirus, with investors remaining cautious about a swift recovery after more companies issued worrying financial forecasts.

The pan-European STOXX 600 index <.stoxx> was up 0.8% at 0702 GMT, after tumbling more than 3% on Tuesday following a historic collapse in oil prices.

Italian shares <.ftmib> gained 0.9% as Prime Minister Giuseppe Conte said the country – one of the hardest hit in Europe – could start pulling out of strict stay-at-home orders from May 4.

Despite rebounding this month from March lows, the benchmark STOXX 600 remains about 24% below its February record high and analysts expect a corporate recession to deepen in 2020 as a near halt in business activity bites into company earnings.

Gucci-owner Kering slumped 6.3% a day after saying sales were hit hard early in the coronavirus crisis due to the fashion group’s reliance on Chinese customers and that it was premature to say how quickly China sales would rebound.

Roche Holding AG rose 2.1% as the Swiss drugmaker confirmed its 2020 sales and profit outlook amid rising demand for its new COVID-19 tests.

(Reporting by Sagarika Jaisinghani in Bengaluru)