Europe midday: Shares slip off record high; Indivior surges on US move plans
European shares slipped off record highs on Thursday, but momentum continued to be driven by a rally in global equities and signs that the eurozone downturn was easing.
The pan-European Stoxx 600 index was up 0.74% at 494.78 having hit a record 495.77, beating the 495.46 points reached in January 2022. Investors are still punting on interest rate cuts this year as inflation starts to ease.
Sentiment was also boosted overnight after better-than-expected guidance by US semiconductor chip giant Nvidia, which boosted US markets overnight.
"Nvidia earnings appeared to have given global markets a new lease of life, as a huge surge in earnings brought a collective sigh of relief. Overnight gains for the Nikkei 225 saw the Japanese index surge into a fresh multi-decade high, laying the groundwork for a European session that has seen the DAX push into new highs this morning," said Marketscoip analyst Joshua Mahony.
"With 85% of the S&P 500 having reported earnings, we have seen an impressive 3.2% earnings growth for the fourth quarter thus far.”
In economic news, the downturn in the eurozone services sector showed signs of easing, although manufacturing was still in the doldrums, according to a widely-watched survey published on Thursday.
Business activity in the euro area fell at the slowest rate for eight months in February, according to provisional readings from the Hamburg Commercial Bank purchasing managers index (PMI).
The flash eurozone composite output index came in at 48.9, up from January's 47.9), an eight-month high. In the services sector the PMI for business activity hit the critical 50 mark, from 48.4 in the previous month, and its best reading for seven months.
A mark about 50 indicates expansion, anything below is a contraction. In manufacturing, the index slipped to 46.1 from 46.6, a two-month low.
Meanwhile eurozone inflation edged lower last month to 2.8% in January, down from December’s 2.9%. That was in line with both the first estimate and consensus. Inflation was 8.6% a year previously.
In equity news, Indivior shares surged 17% after the pharma company posted a 27% jump in full-year profits and the announcement of plans to ditch its London listing in yet another blow to the British capital's reputation as a financial centre.
Nestle fell 3.7% after the food giant reported lower than expected full-year sales as inflationary pressures weighed on consumer demand.
German pharma supplier Gerresheimer powered ahead after annual results, while Dutch chipmaker BE Semiconductor was up on a readacross from Nvidia.
Rolls-Royce jumped to the top of the Britain's FTSE 100 as it reported a more than doubling of its full-year profits, underpinned by its civil aerospace segment.
Beazley rallied as it upgraded its guidance for the undiscounted combined ratio from low-80s to mid-70s for 2023 thanks to better-than-expected claims experience during the year. It also said that as well as an ordinary dividend, shareholders will receive an additional capital return for the year of around $300m.
Anglo American was up despite slashing its annual dividend by a half after seeing profits plunge in 2023 on the back of impairments and downturns in the platinum and diamond markets.
Reporting by Frank Prenesti for Sharecast.com