UPDATE 2-European stocks at six-week high as ECB's Draghi hints at stimulus


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    * STOXX 600 sees best day since Jan 18 
    * ECB chief points to more action if economy does not
    * All European sectors higher; mining, utilities stocks lead
    * Chipmaker Siltronic sinks after sales, profit warning

 (Updates to close)
    By Medha Singh and Susan Mathew
    June 18 (Reuters) - European Central Bank chief Mario
Draghi's dovish remarks sent European stocks to six-week highs
on Tuesday while news that the United States and China would
resume trade talks at the G20 summit also boosted sentiment.
    Draghi hinted at the possibility of new rate cuts or asset
purchases if inflation did not head back to its targets. His
comments weakened the euro, lowered European bond yields to
fresh lows and helped stock markets climb globally.  urn:newsml:reuters.com:*:nECBSINTRA
    The pan-European STOXX 600 index  .STOXX  closed 1.8%
higher, after having fallen as much as 0.5% earlier in the
session. It posted its best day in five months.
    Italy's FTMIB  .FTMIB , France's CAC 40  .FCHI  and
Germany's DAX  .GDAXI  climbed more than 2% while most others
ended over 1% higher.
    The eurozone stocks  .STOXXE  were particularly boosted, up
2% as exporters in the eurozone benefited from a weakness in the
single currency  EUR= .    
    News that Washington and Beijing would resume trade talks
after a long lull in order to prepare for a meeting later this
month pushed up trade-sensitive auto shares  .SXAP  and
basic-resources stocks  .SXPP .
    Utilities  .SX6P , which is among the sectors considered as
bond-proxies, racked up a 2.3% gain.
    "Judging by the tone of Draghi's speech, it would probably
take only a small downward deviation in growth and core
inflation, and/or an outsized drop in survey-based inflation
expectations, for the ECB to take action," said Florian Hense,
European economist at Berenberg in London.
    Meanwhile, the newsflow from European corporates continues
to point to a euro zone economy struggling to get back off the
ground after a decade of monetary efforts to reboot growth. 
    German chipmaker Siltronic  WAFGn.DE  tumbled 7.8% after
issuing its second profit warning in two months, which came hot
on the heels of U.S. chipmaker Broadcom's shock statement last
week that trade issues would knock $2 billion off 2019 sales.
    "The series of warnings in the chip business is further
proof that the trade war is a key risk in the background," said
Simona Gambarini, a markets economist at Capital Economics.
    Concerns over the protracted U.S.-China trade war drove
European stocks 6% lower in May, their worst performance in more
than two years, and spurred bets that central banks worldwide
would turn more accommodative.
    Other European chipmakers STMicroelectronics  STM.MI , ASM
International  ASMI.AS  and ASML Holding  ASML.AS , which were
pressured by Siltronic's results earlier, recovered losses to
trade higher, pinning hopes on a positive outcome from the G20
    The rising hopes of a more accommodative stance by the ECB
and the U.S. Federal Reserve has helped the STOXX 600 gain more
than 4% so far this month.
    All eyes will now shift to the U.S. central bank which is
expected to leave borrowing costs unchanged at a two-day policy
meeting starting on Tuesday but may lay the groundwork for a
rate cut this year.
    Danish medical device maker Ambu  AMBUb.CO  plunged 14.2%
after its new chief executive announced cuts to the company's
growth prospects for this year and next.  urn:newsml:reuters.com:*:nL8N23P1B7

Price performance of Euro zone stocks and STOXX 600     https://tmsnrt.rs/2ZFqn1F
 (Reporting by Amy Caren Daniel, Medha Singh and Susan Mathew in
Bengaluru; editing by Patrick Graham and Ken Ferris)
 ((Amy.CarenDaniel@thomsonreuters.com ; within U.S.
+1-646-223-8780; outside U.S. +91 80 6749 9250 ; Reuters
Messaging: Amy.CarenDaniel.thomsonreuters.com@reuters.net))

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