Europe open: Shares edge ahead as Covid restrictions eased
European shares were holding gains at the open on Wednesday as hopes on a coronavirus vaccine, signals on relaxed curbs on the Continent and progress on the US presidential transition of power helped boost sentiment.
The pan-European Stoxx 600 index was up 0.12%. The UK FTSE 100 index rose 0.4% and the French CAC 40 was 0.43% higher in early trade. US Dow Jones futures were up 22 points, or 0.09%.
Germany and UK’s four nations unveiled plans to allow family gatherings at Christmas. French President Emmanuel Macron announced a gradual relaxation to France’s lockdown, but bars and restaurants will have to stay closed until January 20.
Investors were also eyeing a UK spending review from Finance Minister Rishi Sunak’s later on Wednesday where he is expected to outline further measures to support the economy.
Bank stocks were in positive mood after Yves Mersch, vice-chair of the European Central Bank’s supervisory board, said eurozone banks may be allowed to resume dividend payouts in 2021 if their balance sheets were strong enough.
In equity news, Virgin Money fell after the financial services provider reported a 77% slump in annual profit as it took a £501m impairment charge against an expected surge in bad loans.
GKN owner Melrose rallied after saying it was trading at the top of board expectations, although it also struck a cautious note about the outlook. Aerospace sales fell 37% in the four months to the end of October but the automotive and metallurgy business picked up with an improving trend. Nortek Air Management revenue rose 13%.
United Utilities rose as it lifted its interim dividend despite posting a drop in profit, while animal genetics company Genus gained after saying it is likely to perform ahead of its previous profit growth expectations for the financial year 2021.
Shares in animal genetics company Genus rose as the company said momentum seen at the end of the previous trading year had carried over into the current one.
Industrial flow control equipment maker Rotork was also in the black as it said 2020 adjusted operating profit is set to be at or slightly above, the top end of the range of current market expectations.
On the downside, defence company Babcock International slid as it reported a decline in full-year profit and revenue as costs rose due to the Covid-19 pandemic.