Europe midday: Shares rally on strong PMIs, Sainsbury's bid talk
European stocks on extended gains at midday after last week's falls, with UK supermarket chain Sainsbury's surging on takeover speculation.
The pan-European Stoxx 600 index was up 0.25% in early trade, with the UK's FTSE 100 up 0.29%.
IHS Markit’s Flash Composite Purchasing Managers’ index, fell to 59.5 in August from 60.2 last month. A mark above 50 separates growth from contraction
"Markets enter the new week with some renewed optimism, having ended the previous week’s tumultuous ride in positive fashion," said interactive investor head of markets Richard Hunter.
"Amid a quiet week for company and economic updates, the Jackson Hole symposium in the US will take on extra significance, with investors focusing sharply on any comments from the Federal Reserve on its current policy. The more recent economic numbers emanating from the US have suggested that the Fed has some additional breathing space before tapering begins, given the mixed messages which the data has provided.
"Even so, any variance from the message will unsettle investors, whether that be in terms of the timeline for the withdrawal of tapering or a more hawkish view on inflationary trends."
In equity news, Sainsbury's surged 13% following a report that US private equity firm Apollo is considering a bid for the UK supermarket chain. According to The Sunday Times, Apollo is circling Sainsbury’s with a view to possibly launching bids of more than £7bn, after scouring the industry for takeover targets.
Germany’s BioNTech rose after a report said the US Food and Drug Administration was aiming to give full approval to its partner Pfizer’s Covid-19 vaccine.
Luxury stocks including LVMH, Kering and Moncler rallied after last week's sell off on China’s wealth redistribution plans.
Switzerland-based Cembra Money Bank plunged 28% to the bottom of the Stoxx 600 after it terminated its credit card partnership with Swiss retailer Migros.
Education publisher Pearson was boosted by an upgrade to ‘overweight’ from ‘neutral’ at JPMorgan.