European stocks eye longest winning streak in six months

European shares were on course for a fifth day of gains on Tuesday, with retail and basic resources stocks particularly strong as investors anticipated a more accommodative policy stance from the U.S. Federal Reserve this week.

The benchmark STOXX 600 rose 0.5 percent by 0932 GMT, hitting a five-month peak in what would be its longest  winning streak since mid September. Gains were broad-based although Germany's DAX led the pack with a 0.6 percent rise.

The Fed's two-day meeting starts on Tuesday, with financial markets expecting the U.S. central bank to reinforce a halt to further rises in interest rates while possibly going further on a plan to cease reductions in its balance sheet.

That would follow moves by the European Central Bank two weeks ago to reloosen policy and pump more money into the financial system, offering hope of a continuation of stock market gains.

"There is a slightly better sentiment about stabilization on the global economy compared to late last year," said Geoffrey Yu, head of UK investment office at UBS Wealth Management.

"As long as we have this stabilization anchored by clear expectations of a dovish Fed, or at least a non-hawkish Fed, this will be enough to keep things going," Yu said.

Bank stocks handed back early losses to trade up 0.4 percent, after jumping more than a full percentage point on Monday following confirmation of merger talks between Deutsche Bank and Commerzbank.

Scandal-hit Danske Bank fell more than 5.3 percent in the aftermath of a vote by shareholders against a proposal to break up the bank.

NEW VOTE

News on Brexit also pointed to a delay in efforts by British Prime Minister Theresa May to get her divorce deal through parliament.

The speaker of parliament on Monday ruled May could not put her deal to a new vote unless it was re-submitted in a fundamentally different form. May is due at an EU summit in Brussels on Thursday at which she will ask for a delay to Britain's planned departure from the bloc on March 29.

London's FTSE 100, packed with international companies that benefit from a weaker British pound, rose 0.4 percent, boosted by oil majors and miners.

Online supermarket Ocado climbed to a record high after posting strong gains in first-quarter retail sales despite a fire at its flagship distribution centre.

Luxury stocks got a lift from positive trade surplus data from Switzerland, with the retail index gaining nearly 1 percent.

Chilean copper miner Antofagasta advanced about 4  percent and was the top gainer on the STOXX 600, as a higher than expected dividend overshadowed a drop in core earnings.

French telecoms operator Iliad dropped more than 2 percent after the company cut its cashflow target for 2020 in France and added it was considering the sale of part of its mobile assets.