Europe midday: Shares hold gains as IWG bid talk cools
European shares maintained gains at midday on Tuesday, despite the rumoured bidder for IWG saying it was not planning to make an offer for the workspace provider.
The pan-European Stoxx 600 index was up 0.38% in early trade. Germany’s DAX rose 0.86% and the UK’s FTSE 100 slipped from morning highs, but was still 0.18% higher as data showed British house prices jumped by the most in more than 16 years in June.
“Markets remain finely balanced but generally positive ahead of a further raft of factors which are set to dictate the nearer term direction,” said Interactive Investor head of markets Richard Hunter.
“Volatility has dampened, with the approach to both the quarter and half-year end lessening the motivation to take on new positions, and rather to lock in any gains made so far.”
Neil Wilson at Markets.com said investors were looking for more direction on inflation and bond yields.
"Everyone seems happy to buy the line that inflation will be transitory: the super-hot peaks we are getting right now will be, we knew that as base effects and pent-up demand played out; the question is what sort of new inflation regime persists beyond this summer. Once the inflation genie is out the bottle it is hard to put back in easily," he said.
Shares in IWG, the world's largest serviced office group and rival to WeWork, rose 8% earlier in the day on reports the company has been in secret talks with private equity firm CC Capital about a potential takeover offer that could value the company at more than £4bn, Sky News reported citing unnamed sources.
However, CC Capital later issued a statement saying it did not plan to make an offer for the London-listed firm, although it did not deny talks had taken place.
Shares in French electrical parts supplier Rexel shares jumped as the company said it expected same-day sales growth of 12% - 15%, compared with its previous forecast of 5% - 7%.
Housebuilders were in demand after new figures from Nationwide revealed that UK house prices grew at their fastest annual pace for more than 17 years in June, up 13.4%. Taylor Wimpey, Persimmon and Barratt Developments were up as a result.
Travel company TUI was down almost 5% as cases of the Delta variant of the coronavirus continued to spread globally - hitting hopes of a summer-led recovery for the leisure industry. Reports of a potential ban on UK travellers in Germany, and new tighter travel rules for British tourists going to Spain have also hit sentiment.
“Concerns (are) growing that the race between the vaccine and the virus is being lost,” said Michael Hewson, chief market analyst at CMC Markets.