UPDATE 3-Healthcare rally buoys European stocks amid grim earnings outlook

(For a live blog on European stocks, type LIVE/ in an Eikon
news window)
* Healthcare stocks rise to more than one-month high
* Manufacturing sector surveys likely to be dismal
* EssilorLuxottica pulls dividend, signals cost cuts

(Adds graphic, updates prices to close)
By Sagarika Jaisinghani and Susan Mathew
April 20 (Reuters) - European stock markets closed higher
after a volatile session on Monday, recovering losses caused by
a collapse in oil prices and fears of the worst quarterly
earnings season since the global financial crisis.
Healthcare stocks .SXDP led the charge, marching to over
six-week highs after drugmaker Novartis NOVN.S won the
go-ahead from the U.S. Food and Drug Administration to conduct a
randomized trial of malaria drug hydroxychloroquine against
COVID-19. The pan-European STOXX 600 index .STOXX closed up 0.7%,
after losing as much as 1.2% during the session as oil prices
plunged due to oversupply concerns. The energy sector .SXEP
posted its fourth decline in five sessions. O/R As the first-quarter results season kicks into high gear,
analysts expect STOXX 600 firms to post a 22% plunge in earnings
as a result of the pandemic, according to IBES data from
Refinitiv, after estimates at the start of the year had
initially forecast a 10.5% rise. Ray-Ban maker EssilorLuxottica ESLX.PA became the latest
company to scrap its dividend and said it could consider cost
cuts to shore up cash reserves. Its shares fell 0.8%.
"On one hand we're getting the reality check of company
earnings and real data from the global and European economy, but
on the other hand we've got the impact of significant fiscal and
monetary stimulus coming through," said Richard Dunbar, head of
multi-asset research at Aberdeen Standard Investments.
Readings on April manufacturing from across the world are
due on Thursday and are expected to hit recession-era lows.
The STOXX 600, which hit an eight-year low in March, has
since recovered about 23% due to big fiscal and monetary
stimulus packages around the world, but still remains 31% away
from its record high as evidence of the economic hit from the
pandemic piles up.
The travel and leisure sector .SXTP , worst hit by the
pandemic, has recouped almost half its losses since March lows,
but still remains about 40% down for the year.
With coronavirus deaths slowing in some of the worst-hit
parts of Europe, some countries have signalled they could relax
strict stay-at-home orders to restart supply chains, even as
health officials warn of another wave of infections if the
lockdowns are lifted too soon.
Hussein Sayed, chief market strategist at FXTM, said a
second wave of infections and subsequent lockdown would be a
disastrous outcome.
"Instead of confronting a steep recession, we might end up
with a long-lasting depression," he added. "Equity performance
cannot diverge for a prolonged period of time from fundamentals,
so if we do not see a true economic recovery in the coming
months, we expect another leg lower in stock markets."
Dutch health technology company Philips PHG.AS rose 6.1%
after saying sales and profit margins could still rise in 2020
if the pandemic eases in coming months. Airbus AIR.PA lost 2.1% after Reuters reported it had put
six jets made for Malaysia's AirAsia AIRA.KL up for sale.
Investors will closely watch a European Union summit on
Thursday for signs of the bloc's response to the coronavirus
crisis following several calls for a unified euro zone bond
issuance programme. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
European airlines and hotels off lows, still down a lot https://reut.rs/34S3vQk
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>