Europe close: Stocks jump after report gas supplies through Nordstream 1 to resume

European shares pushed higher on Tuesday following a report from Reuters that Moscow would resume natural gas exports to Europe through the Nordstream 1 pipeline at the same limited volumes as before this year's annual maintenance began on 11 July.

The pan-regional Stoxx 600 index advanced 1.38% to reach 423.41, the German Dax jumped 2.69% to 13,308.41 and France's Cac-40 was up by 1.79% to 6,201.22.

Euro/dollar was up 0.93% to 1.0237 on the back of the Nordstream 1 news and ahead of a key speech from Italian PM Mario Draghi the next day, with the European Central Bank's next policy meeting scheduled for Thursday.

According to Barclays Research's baseline scenario for continued tight Russian gas supplies, wholesale prices would remain high but "major power rationing" could be avoided, although euro area GDP would still record a contraction of 0.2% on the quarter in the last three months of 2021, followed by a dip of 0.1% in the first quarter of 2023.

A full halt of Russian supplies on the other hand would see German GDP shrink by 6% over four quarters, followed by a 4% drop in Italy, 3% in France and 2% in Spain.

"A risk of a protracted shut down of Nord Stream 1 deliveries looks remote due to high mutual dependence between Russia and Europe," Barclays said in a research note sent to analysts, although a full halt of gas flows to Western Europe would be manageable for Russia.

In the UK, official data showed that employment picked up in the three months to May but real pay fell at the fastest rate since records began.

Average total pay growth was 6.2%, down from 6.8% in April, while regular pay growth excluding bonuses was 4.3%, up a touch from 4.2%. Adjusted for inflation, however, total pay fell by 0.9% and regular pay was down 2.8% - the biggest fall since records began in 2001.

The data also showed that the unemployment rate was steady at 3.8% in the three months to May.

In equity news, French power company EDF surged 15% after the release of a €9.7bn nationalisation plan and upbeat corporate earnings.

Informa shares gained 6% as the company backed full-year expectations and hailed strong first-half revenues.

Shares in cyber security company Darktrace jumped 5% after the firm said it expected full-year core earnings margins to be above expectations, as customer numbers increased.