CORRECTED-UPDATE 2-European stocks close tad higher, led by gains in banks, energy

(Corrects paragraph 2 and bullet to say banking index recorded
its best five-day rally since "April 2017", not "December 2016";
corrects day to "Tuesday" from "Monday" in paragraph 1)
* Healthcare, utilities, food and beverages fall
* Banks log best 5-day run since April 2017
* Ferrari drops in profit-taking after new models unveiled

By Sruthi Shankar and Medha Singh
Sept 10 (Reuters) - A rally in banking shares and other
recently battered sectors such as oil and gas and automakers
kept the mood buoyant in European stock markets on Tuesday, as
investors speculated over policy measures by the European
Central Bank later this week.
The pan-European STOXX 600 index .STOXX , after opening in
the red, closed 0.1% higher as the banking index .SX7P climbed
for a fifth session, its best five-day rally since April 2017.
Oil and gas .SXEP , basic resources .SXPP and automakers
.SXAP - among the worst-hit sectors this year on worries over
the U.S.-China trade war, Brexit and a global slowdown - gained
between 0.2% and 2%.
Investors seeking value were out in full force, buying
stocks that have lagged the broader markets this year and
driving a turnaround in early losses.
The Austrian stock index .ATX , one of the worst performers
of 2019, rose more than 1%, while Swiss shares .SSMI , a top
performer, dropped 0.4%.
"Buying the winners and selling the losers has worked really
well since the middle of February, but we think performance has
been too good," Jefferies strategists wrote in a note.
"We think rotating back to valuations mattering makes sense
and we have started to see this happen here in September."
Banks .SX7P outshone amid a recovery for euro zone debt
yields as investors tempered hopes of aggressive easing measures
from the ECB even as the central bank is expected to cut its
deposit rate for the first time since 2016 and restart an asset
purchase programme. "There seems to be anxiety in the market over how much they
had already priced in and maybe uncertainty over whether the ECB
will deliver to that extent," said Bas van Geffen, an ECB
quantitative analyst at Rabobank.
The broad rally in euro zone banks helped Spanish lenders
such as Caixabank CABK.MC , Banco Sabadell SABE.MC and Bankia
BKIA.MC overcome early weakness after the European Court of
Justice said the IRPH mortgage price index used during Spain's
property crisis could be considered abusive, potentially causing
banks to pay compensation. Meanwhile, defensive sectors such as healthcare .SXDP ,
utilities .SX6P and food and beverages .SX3P were among the
biggest losers. The stocks had been in high demand over the past
three months amid trade and growth uncertainties.
After a turbulent August, stocks globally were on a firmer
footing amid expectations of stimulus from major central banks.
Those hopes were further underpinned by weak factory data from
China showing prices shrank in August at their fastest pace in
three years. MKTS/GLOB
Technology stocks .SX8P , a key growth sector, fell about
1%, tracking their U.S. counterparts lower. .N
JD Sports JD.L topped the STOXX 600 after it reported
higher first-half pretax profit, helped by more demand for gym
apparel and premium-branded fashion. Shares in French utility EDF EDF.PA sank 7% after warning
it had discovered problems with the weldings and other
components in some of its nuclear reactors, raising fears about
potential closure. Italian shares .FTMIB , meanwhile, dropped 0.6% after a
report the new ruling coalition government plans to raise the
2020 budget deficit target to around 2.3% of economic output,
bringing it very close to the 2.4% level that almost triggered a
European Union disciplinary procedure against Italy this year.
Ferrari NV's shares RACE.MI dropped 6% to the bottom of
the FTSE MIB index, with investors booking profits after the
automaker unveiled two new cars on Monday. The stock is still up
59% this year.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
European defensives outperform in 2019 https://tmsnrt.rs/2A5a6rI
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>