Europe open: Shares up despite weak German data, rising Covid cases

European shares edged ahead at the open on Thursday despite data showing a bleak outlook for the German economy and rising Covid cases in the region.

The pan-European Stoxx 600 index was up 0.48% in early deals with all major Continental bourses following suit. Asian and US shares closed higher, providing some impetus. Wall Street will be shut for the Thanksgiving holiday.

On the economic front, the forward-looking German GfK barometer showed consumer confidence tumbled to -1.6 for December, down 2.6 points from the previous month.

Meanwhile, estimates for third quarter economic growth in Europe’s largest economy were revised down to 1.7% from 1.8%.

The figures reflect the huge inflationary pressures weighing on Germany's manufacturing-heavy economy. These are now being compounded by renewed Covid worries, with a recent surge in cases sparking fears of another lockdown.

“Consumer sentiment is currently being squeezed from two sides. On the one hand, the number of cases in the fourth wave of the coronavirus pandemic is exploding, which threatens to overwhelm the health system and could lead to further restrictions,” said GfK consumer expert Rolf Buerkl said.

“On the other hand, the purchasing power of consumers is dwindling due to a high inflation rate of 4%. The outlook for the upcoming Christmas season is now somewhat bleak.”

Analysts at Pantheon Macroeconomics said they were concerned about figures for the fourth quarter.

“The fall in the advance GfK consumer sentiment index is just the beginning of what will likely be a sustained drag on sentiment between now and Christmas, as the virus re-imposes itself on the near-term economic outlook,” they said.

In equity news, Remy Cointreau jumped more than 10% to a record high after the drinks maker raised its annual profit outlook as strong demand for its premium cognac drove a stronger-than-expected operating profit in the first half.

Swedish radiation treatment equipment maker Elekta gained after the company won an order to supply the International Children's Cancer Research Centre in Ghana.