Europe midday: Shares continue gains as investors shrug UK GDP crash

European shares continued their strong run on Wednesday as investors shrugged off UK recession woes and US fiscal stimulus worries as Liberty Global's takeover of Sunrise Communications boosted sentiment.

Growing uncertainty over whether the US Congress would sign off on more fiscal stimulus to follow President Donald Trump’s unilateral coronavirus-related spending measures was cast aside with the pan-European Stoxx 600 index at 372 points in midday trade.

London’s FTSE 100 was in the green despite the country going into its deepest recession since records began. With the slump in GDP widely expected, economists were looking for indications of the shape and speed of any recovery, with hopes diminishing of a rapid bounce back.

“The monthly data shows that a bounce back is underway and picked up steam in June. However, its pace is consistent with a slow recovery – one that seems unlikely to be V-shaped. We expect economic activity to return to pre-pandemic levels only in the second half of 2022,” said Debapratim De, senior economist at Deloitte.

After a slightly sluggish start, equities got a large boost from the news that Liberty Global was taking over Sunrise Communications in a deal valuing the Swiss telecoms group at SFR6.8bn.

Sunrise shares topped the gainers after the board recommended the all-cash offer of SFR110 per share.

Germany’s Freenet also benefited, as it holds around 24% of Sunrise and signed a binding, unconditional commitment to tender its shares at the offer price.

Shares in M&G rose as first-half profit more than halved as the savings and investments company suffered fund outflows and pressure on retail margins during the Covid-19 market disruption.

The FTSE 100 company declared an interim dividend of 6p a share and said it did not expect to increase the payout while the threat of Covid-19 remains.

Insurer Admiral was higher after it reinstated its special dividend and reported a jump in first-half profit after motor claims fell as drivers stayed home during the coronavirus lockdown.

ABN Amro shares moved into the top risers after the bank said it would end all trade and commodity financing after a string of losses, in a restructure that will see the Dutch bank cut 800 jobs with its corporate bank will retreating to northwest Europe, exiting the US, Asia, Australia and Brazil, except for clearing operations.

Shares in Danish services provider ISS were the biggest faller after disappointing second-quarter results, as coronavirus lockdown measures and large numbers of people working from home hurt demand for its services, in particular catering.

ISS, which operates in 63 countries and provides services ranging from call centres to office cleaning, catering and security, posted an operating loss of DKR785M, down from a DKR1.42bn profit a year earlier.

Cineworld stock, which soared almost 30% on Tuesday as speculation it could be go private or be taken over, gave back a large chuck of those gains in early trade.

Cybersecurity firm Avast also fell as it said it said revenue growth would be at the upper end of guidance for the full year, but the spike in sales from people working at home during the Covid-19 lockdown would not be maintained.