Europe midday: Shares gain on US stimulus optimism

European stocks were still higher on Wednesday as investors awaited the inauguration of Joe Biden as the next US President and were cheered by prospects of a large stimulus package for the American economy.

The pan-European STOXX 600 index extended morning gains and was up 0.55% by lunchtime. Italy’s FTSE MIB was also up after Prime Minister Giuseppe Conte won a confidence vote in the upper house Senate on Tuesday, allowing him to remain in office after a junior partner quit his coalition last week.

US Dow Jones futures were up 53 points. Treasury Secretary nominee Janet Yellen overnight called for big fiscal spending to kick-start help the pandemic-stricken economy.

Luxury stocks were in favour after Richemont posted a 5% increase in quarterly sales, led by strong growth at its jewellery brands in Asia Pacific and the Middle East. The stock rose 4.8% in the morning, but settled back for a 1.94% gain.

Education publisher Pearson led the risers, with shares in the company up 7.39% as it said sales and profit for the full year were in line with expectations despite the additional impact of Covid-19 in the fourth quarter.

Britain’s Burberry jumped were up 1.8% after an initial morning surge as the high-end fashion retailer released a positive earnings update, although it warned of a Brexit hit on sales to non-EU customers after a VAT refund scheme ended at the start of January.

Germany’s Hugo Boss added 4.6% after Mike Ashley-led Frasers said it boosted its stake in the company.

Shares in Nordic telecom operator Telia rose 3.89% as the firm reported better-than-anticipated operational cash flow in 2020.