Europe midday: Positive eurozone data helps extend share rally
The rally in European stocks was extended at lunchtime on Wednesday, as a commodity price boost for miners and positive eurozone data provided impetus for investors.
The pan-European Stoxx 600 index rose 1.36%, with the German DAX also up 1.36 and the UK's FTSE 100 up 1.11%.
Business activity in the eurozone rose in April, suggesting the currency zone's economy began to recover after shrinking in the first quarter.
The IHS Markit composite purchasing managers' index rose to 53.8 in April from 53.2 in March and was slightly stronger than a preliminary reading of 53.7. A reading of 50 marks the difference between growth and contraction.
April's result was the second month of growth as manufacturing and services industries expanded. The final services business activity index rose to 50.5 from 49.6 and beat a preliminary estimate of 50.3. Manufacturing output was broadly in line with the strong showing in March.
US markets had fallen overnight as Treasury Secretary Janet Yellen said "interest rates have to rise somewhat" to prevent the post-covid economy from overheating.
The tech-heavy Nasdaq index tumbled as investors sold off companies such as Apple and Amazon amid concerns over higher borrowing costs an uncertainty over an upcoming jobs report.
"A statement, obviously, that didn’t go down well with investors, who were already fretting over the impact of the ongoing chip shortage on tech and car stocks," said Spreadex analyst Connor Campbell.
"Such was the reaction that the former Fed chair issued a correction, of sorts, assuring the markets that a rate hike is neither something she is ‘predicting or recommending’."
"If Europe’s open is anything to go by, that has been enough to put the issue to bed – for now, anyway."
Shares in major mining firms including Rio Tinto, BHP and Anglo American were all higher as copper prices moved beyond $10,000 a tonne, the highest level in a decade, on higher demand and lower inventories.
German commercial kitchen equipment maker Rational AG rose to the top of the Stoxx, up almost 9% on signs of improvement in March with revenues, sales and orders all showing a turnaround.
Car maker Stellantis edged up 0.8% as the company reported a better-than-expected quarterly revenue but warned that a global shortage of semiconductors would affect production in the current quarter.
Danish facilities management firm ISS rose more than 6.6% as demand for its cleaning services during the pandemic helped an improved quarterly performance.
German logistics company Deutsche Post rose after on raising its operating profit forecast for 2021, while Danish shipping company Maersk also gained as it forecast “exceptionally strong” first quarter performance to continue for the rest of the year.