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* Cyclical stocks lead gains again
* London's FTSE hit by stronger pound
* Maersk gains after Berenberg upgrade
(Updates to market close)
By Sruthi Shankar
Jan 12 (Reuters) - European stocks closed flat on Tuesday,
with economically sensitive sectors including banks, automakers
and oil supporting markets across the continent.
The regional STOXX 600 index closed up 0.05% after
a mixed session, while Germany's DAX rose 0.1%,
France's CAC inched 0.2% lower and Britain's FTSE 100
fell 0.7%.
Investors are awaiting the start of the U.S. earnings season
this week as well as clarity on fiscal spending plans under
incoming U.S. President Joe Biden, who takes office on Jan. 20.
In Europe, automakers jumped 1.7% to lead gains
after Renault, BMW and VW
reported 2020 sales.
Their U.S. carmaking rivals also got a boost after General
Motors announced its entry into the growing electric
delivery vehicle business.
Other cyclicals such as banks, travel and leisure
and oil and gas extended last week's rally on
hopes that a larger U.S. stimulus under the incoming Biden
administration will spur faster economic recovery.
Oil majors BP and Royal Dutch Shell gained
close to 2% as crude prices hit an 11-month high on tighter
supply and expectations for a drop in U.S. inventories.
Still, losses in defensive sectors such as healthcare,
utilities and consumer staples checked gains in most markets.
"Investors are still wondering where the next big catalyst
for further upside will come from, and are painfully aware that
the COVID-19 crisis remains untamed despite the introduction of
vaccination programmes," Chris Beauchamp, chief market analyst
at IG wrote in a client note.
Britain's exporter-heavy FTSE 100 underperformed
other European markets, hit by a stronger pound and a surge in
new COVID-19 cases.
Companies listed on Europe's STOXX 600 are expected to
report a 26.3% drop in fourth-quarter earnings, data from
Refinitiv I/B/E/S shows, as restrictions to control soaring
coronavirus cases slowed an economic recovery.
That comes ahead of a clear improvement predicted for the
first two quarters of 2021, when earnings are set to rise 40.4%
and 75.1% respectively.
Maersk rose 3.4% after brokerage Berenberg
upgraded the Danish shipping company's shares to "buy", saying
earnings momentum driven by freight prices could see it run
higher.
Swiss online pharmacy chain Zur Rose hit a record
high, surging almost 15% to the top of STOXX 600, after BofA
Global Research started coverage with "buy" rating.
(Reporting by Amal S and Sruthi Shankar in Bengaluru; Editing
by Subhranshu Sahu, Arun Koyyur and Alexander Smith)
