Europe midday: Shares rally on EZ data; TIM slumps

European shares shrugged off the global gloom on Thursday and rallied on the back of upbeat eurozone employment and economic sentiment data.

The pan-regional benchmark Stoxx 600 index was up 0.3% to 514.99 having fallen at the open in line with US an Asian markets as rising bond yields weighed on equities and investors nervously eyed key US and eurozone inflation data on Friday.

Eurozone unemployment unexpectedly dipped to a record low in April, official data showed on Thursday, while confidence edged higher.

According to Eurostat, the statistical office of the European Union, the seasonally-adjusted unemployment rate was 6.4%, down marginally on March’s 6.5% and the lowest since the single currency was created.

Most analysts had forecast no change.

In the wider EU, the unemployment rate was unchanged at 6.0%.

The data coincided with the European Commission’s latest Economic Sentiment Index, which showed a marginal improvement in confidence in both the Eurozone and wider bloc in May.

In the EU, the index rose 0.3 points to 96.5, supported by improved confidence in the services sector and among consumers, despite waning confidence in retail trade and construction.

In the single currency bloc the index edged 0.4 points higher to 96.0.

"European markets are attempting to regain lost ground after a sharp collapse that saw equities throughout the US, Asia and Europe tumble," said Scope Markets analyst Joshua Mahony.

"At the heart of this move was a surge in US treasury yields, as weak demand for the latest seven-year treasury auction brought concerns that we might see yields have to rise further due to a higher-for-longer outlook around US interest rates."

Investors will now be watching eurozone inflation data for any clues as to how many times the European Central Bank will cut interest rates this year beyond its expected first cut at its June meeting next week.

That news will be followed by the US personal consumption expenditures price index report - the Federal Reserve’s preferred inflation gauge. Markets have priced in just one cut this year after minutes from the Fed’s most recent meeting and hawkish comments from policymakers expressing concerns over persistent, or "sticky" inflation.

In equity news, shares in fell sharply as a fall in first-quarter domestic revenue and core profit disappointed investors.

shares in Auto Trader surged 12% as the car marketplace specialist said its new financial year had got off to a strong start, after it posted in jump in annual sales and profits.

Mining stocks were lower after Australian giant BHP walked away from its £38.6bn plan to take over rival Anglo American.

Scandinavian airline SAS slumped 13% after reporting a net loss of 2.9bn Swedish kroner ($271 million) in the quarter to April, higher than the SEK 1.52bn loss reported a year earlier and despite a 12% increase in revenue to SEK 9.9bn.

In its outlook, the airline said it intends to complete its restructuring proceedings in Sweden and the US “as soon as possible,” with a target of summer 2024.

Reporting by Frank Prenesti for Sharecast.com