Europe midday: Shares surge as rally continues, earnings boost sentiment
European shares surged on Wednesday on the back of a rebound on Wall Street and comments from the Bank of Japan's deputy governor who attempted to calm volatile markets, while a jump in German industrial production also provided a boost.
The pan-regional Stoxx 600 index was up 1.45% in early deals to 495 points, with all major continental bourses higher.
US shares broke a three-day losing streak, sparked by fears that the world's biggest economy may be headed for a recession. Asia-Pacific markets were up overnight, while U.S. stock futures were higher on Tuesday evening.
In Japan, BoJ deputy governor Uchida Shinichi said rates would not rise while markets are volatile, in response to extreme movements in the stock market that saw the biggest sell-off since 1987's Black Monday crash as well as the largest rise since October 2008.
Uchida told businesses leaders in northern Japan that unlike Europe or the United States, “Japan’s economy is not in a situation where the Bank may fall behind the curve if it does not raise the policy interest rate at a certain pace”.
“Therefore, the Bank will not raise its policy interest rate when financial and capital markets are unstable,” he said.
Derren Nathan, head of equity research at financial platform Hargreaves Lansdown said: "The Bear that chased markets off a cliff in recent days is taking a well-earned break, but time will tell if it's just hibernating."
In economic news, industrial production in Germany jumped in June, led by a partial rebound in output from the auto sector. On a calendar and seasonally-adjusted basis, total output advanced at a month-on-month pace of 1.4%, according to Destatis. Economists had pencilled in a rise of 0.9%.
In equity news, Evotec shares plunged by 35% as the German drug discovery company lowered annual earnings guidance.
Novo Nordisk shares were lower as the Danish pharma company lowered profit forecasts after smaller-than-expected second quarter net earnings.
Sportswear maker Puma slumped after it narrowed its outlook for full-year core profit.
Commerzbank fell after second-quarter net profit dropped 5%.
Car parts maker Continental rose after second-quarter results smashed estimates, while Just Eat Takeaway soared after JP Morgan upgraded the rating on the stock to 'overweight' from 'neutral'.
Reporting by Frank Prenesti for Sharecast.com