Europe midday: Shares up as EZ PMI optimism; Atos tanks, UniCredit soars
European shares were higher on Monday as investors digested comments from US Federal Reserve chairman Jerome Powell about the pace of rate cuts this year, estimate-smashing results from UniCredit and the continuing funding crisis at Atos.
The pan-regional Stoxx 600 index was up 0.27% in early deals at 485.24 with all major Continental bourses also higher.
In an interview overnight, Powell warned against moving too soon on interest rates before inflation was fully tamed.
"The danger of moving too soon is that the job’s not quite done, and that the really good readings we’ve had for the last six months somehow turn out not to be a true indicator of where inflation’s heading," he said.
"We don’t think that’s the case. But the prudent thing to do is to, is to just give it some time and see that the data continue to confirm that inflation is moving down to 2% in a sustainable way."
In economic news, the Eurozone economy hinted at early indications of recovery during January, according to Hamburg Commercial Bank and S&P Global, with growing inflationary pressures boosting the European Central Bank's case for holding interest rates steady at their current record highs.
The bloc's composite PMI increased to 47.9 in January, up from 47.6 in December and in line with initial forecasts. The services PMI dipped to 48.4 from December's 48.8, while the HCOB Eurozone manufacturing PMI rose to 46.6 the highest reading in ten months.
While the composite PMI's reading was its strongest score since July, it still fell short of the 50-point threshold separating growth from contraction.
Meanwhile, a separate survey published by Sentix showed Investor sentiment in the eurozone rose in February for the fourth month in a row.
The Sentix economic index for the eurozone climbed 2.9 points to -12.9 points in February, better than expectations of -15.
However, recovery in the single-currency bloc remains sluggish, Sentix said, "mainly due to Germany" where the current assessment there fell to -39.3 points, while expectations recovered only by 2.3 points.
In equity news, Atos shares tanked by a quarter as the troubled French IT firm pulled a €762m rights issue and started talks with its bankers.
Vodafone shares fell after reporting weaker service revenues in Germany and Italy.
Delivery Hero soared after posting better-than-expected results.
UniCredit shares soared to an eight-year high after the Italian bank said it would return all of its €8.6bn 2023 profit pool to shareholders after smashing quarterly earnings forecasts.
Reporting by Frank Prenesti for Sharecast.com