Europe midday: Stocks extend gains as investors await US data deluge
European stocks rose as Wednesday's session developed, extending earlier gains as investors shrugged off strained relations between Russia and Turkey.
At midday, the benchmark Stoxx Europe 600 index was up 1.2%, while France’s CAC 40 and Germany’s DAX were both up 1.4%.
“The geopolitical issue has rapidly lost its importance outside the Turkish borders as the risks of an escalating military interaction are very low at this stage,” said Ipek Ozkardeskaya, market analyst at London Capital Group.
“Although the Russian President [Vladimir] Putin sounds very sharp on the matter, the Turkish response has been quite anodyne. Turkish President [Recep] Erdogan has been crystal clear on the issue, stating that Turkey has no intension whatsoever to escalate the tensions.”
Turkey shot down a Russian warplane on the Syrian border on Tuesday, claiming that it had entered Turkish airspace, although Russia rejected the claim.
Putin called the incident “a stab in the back” and said it could have serious consequences for the countries’ relationship.
On Wednesday, Russia said it planned to send an advanced air defence system to reinforce its air base in Syria. In addition it is considering cancelling a raft of joint business projects with Turkey.
In London, the Chancellor’s Autumn Statement will be in focus at 1230 GMT, with investors likely to keep an ear out for further detail on reported plans for the housebuilders or defence stocks in particular.
Housebuilders rallied ahead of the announcement, during which George Osborne is expected to pledge an investment of just under £7bn in the sector, with the construction of around 400,000 new homes and a range of policies designed to help people buy their own homes
Taylor Wimpey, Barratt Developments, Persimmon, Berkeley Group, Bellway and Bovis Homes were all trading sharply higher.
Elsewhere, Thomas Cook surged after posting its first profit in five years and expressing confidence over 2016.
Metro rallied after the German retailer lifted its 2015 dividend payout more than analysts were expecting.
Construction materials company LafargeHolcim built strong gains as it raised its dividend despite a drop in third-quarter sales.
On the downside, pharmaceuticals company Shire slid following a report that it is working on a new offer for Baxalta.
Still to come on the macroeconomic calendar, investors will eye the release of US initial jobless claims, durable goods orders and personal income and spending at 1330 GMT. New home sales and University of Michigan sentiment are at 1500 GMT.
Markus Huber, senior analyst at Peregrine & Black, said the main focus will be on durable goods and personal income and spending. “While both sets of data will not necessarily make a difference in regard that the Fed will hike rates in December they certainly will play a role when it comes to just how fast further hikes will follow in 2016.”