Europe close: Stocks extend rebound as market volatility eases

European shares extended their rebound on Tuesday driven by traders hunting for bargains and gains on Wall Street and Asia.

"Global markets are showing signs of returning to confidence after a period of heightened fear over the potential for a market collapse," said IG senior market analyst, Josh Mahony.

"The recent Reddit-led targeting of stocks and commodities appears to be fading with GME, AMC, and Silver all on the slide. The [US CBOE] volatility index (VIX) has also provided reason for optimism, with today’s sharp decline in the so called ‘fear gauge’ marking a distinct move away from the highly elevated levels seen since last Tuesdays near three-month high."

The pan-European Stoxx 600 index was up 1.29% at 405.92, with all major regional bourses higher.

Shares were also driven by news that French IT firm Atos had ended takeover talks with US rival DTC Technology.

Atos shares rose 1.9% after the firm said it has decided to stop talks on the potential $10bn acquisition. The stock had been up 4% in early trade.

On a related note, investors waiting on the latest quarterly earnings reports from US technology giants Alphabet and Amazon.

In other corporate news, Fresenius Medical Care slumped 10% after the kidney dialysis firm warned its adjusted net profit would fall this year due to “accelerated Covid-19 related excess mortality of dialysis patients”.

BP shares fell 4.5% after its profit in the last quarter of 2020 missed analyst expectations of $440m, coming in at $115m due to weak energy demand and poor trading results.

Shares in Italian infrastructure group Atlantia rose on news that consortium led by Italian state lender Cassa Depositi e Prestiti asked for more time to submit “an improved and more compelling” binding bid for a stake in its motorway unit.