Europe close: Corporate results help offset Delta concerns, US data
European shares remained near their record highs on Wednesday as upbeat corporate earnings offset investor worries about the rising number of Covid Delta variant cases.
Investors appeared to brush-off two economic reports in the States which some economists said suggested Friday's official jobs report might undershoot forecasts, due to labour and raw materials shortages.
The two reports in question were ADP's private-sector payrolls report and the ISM's services sector purchasing managers index.
"European markets are on the rise in a somewhat volatile day for financial markets," said IG senior market analyst Josh Mahony.
"With Friday's jobs report coming into view, we have seen a raft of economic data points released to provide us with a fresh update on the ongoing recovery."
The pan-European Stoxx 600 index finished up 0.61% to 468.22, alongside a 0.88% rise for the German Dax to 15,692.13.
Italy's FTSE Mibtel meanwhile added 0.53% to 25,490.22.
Overnight on the other hand, Asian shares were boosted by a private survey which showed Chinese services activity growth accelerated in July.
However, the rapid rise in Covid-19 infections from the highly transmissible Delta variant throughout the region was keeping a lid on investor sentiment.
“Concerns that rising infection rates across Asia, and in China especially, appear to be causing anxiety that the rebound story in that part of the world is about to become the weakest link in the global recovery story,” said CMC Markets UK analyst Michael Hewson.
“Not only are we hearing about more cases in China, but we are also getting an acceleration of cases across Indonesia and Thailand, as the virus hunts out the parts of the global economy with low vaccination rates.”
In European news on the other hand, another PMI survey showed Eurozone business activity raced ahead last month, expanding at its fastest pace in 15 years, as the lifting of more restrictions and an accelerated vaccine drive injected life into the bloc’s dominant service industry.
However, supply chain disruptions and labour shortages meant input prices surged at the fastest rate in more than two decades.
In equity news, Commerzbank shares fell 6% as the German lender reported a net loss of €527m in the second quarter, as restructuring expenses and an exceptional write-off to an outsourcing project wiped out profits.
Shares in Siemens Energy also dropped as the company blamed turbine subsidiary Siemens Gamesa for a 37% drop in third-quarter orders and a reduced target corridor for its main profit margin.
Dutch chemicals distribution company IMCD climbed 10% to the top of the index after strong first-half results.
UK house builder Taylor Wimpey gained after upgrading annual guidance and reinstating its dividend as it swung to a first-half profit on the back of a booming housing market. Rival Barratt Developments was also up on the news.
Coffee company JDE Peet’s was up 2% on reporting better-than-expected operating profit for the first half of 2021.