Europe midday: Shares hold gains as inflationary worries persist

The pan-European Stoxx 600 index was up 0.56% with all regional bourses higher. The UK’s FTSE 100 rose 0.57% with investors looking towards a further relaxation of Covid-19 restrictions on Monday, although the mood was tempered by an increasing number of India-variant coronavirus cases in the country.

Wall Street stocks finished well above the waterline on Thursday with technology plays back in favour, after the blue-chip index turned in its worst performance since January in the previous session.

Traders were also looking towards US retail sales later in the day.

Interactive Investor head of markets Richard Hunter said the data “will give further colour to the increasing strength of the US recovery, as fiscal stimulus and a further easing of Covid-19 restrictions improves the mood of a vitally important component of the economy”.

“In what could be a leading indicator, Airbnb yesterday showed a rebound in its numbers following further lockdown lightening with a 52% jump in bookings.”

IG analyst Johsua Malony said recent inflation data releases had "provided a constant undertone of fear, with a surge in PPI and CPI out of the US and China highlighting the theme that will dominate the months ahead".

"Nonetheless, this has been something central bankers have warned us about, and for the time being this jump in prices can be explained away as representing the kind of transitory price movements predicted by the (US) Fed. Fortunately for the Federal Reserve, their plan to expand their inflation target to an average target allows for such overshoot."

In equity news, miners were still on the back foot due to falling commodities prices, with BHP, Rio Tinto and Antofagasta all lower.

Sage shares gained as the company said it expected annual organic revenue growth to be near the top of guidance after investment in its cloud operation prompted a decline in first half profit.