Europe close: Stocks bounce back after interest rate jitters, miners lead
European stocks rallied on Wednesday with a commodity price boost for miners and positive Eurozone data providing impetus for investors.
Also helping investor sentiment, overnight the head of the US Treasury rowed back on her remarks from earlier on Tuesday, saying she had not meant to either predict or recommend interest rate hikes as quoted.
"After yesterday’s bout of wobbles over potential rate rises US stocks are much calmer, but are being left far behind by a rallying European equities complex, pointing to a greater willingness among investors to put money to work in European stocks rather than in their US brethren," mused IG chief market analyst, Chris Beauchamp.
The pan-European Stoxx 600 index rose 1.82% to 441.55, with the German DAX rebounding 2.12% to 15,170.78, while the FTSE Mibtel was up 2.03%.
Business activity in the Eurozone rose in April, suggesting the single currency bloc's economy had already begun to recover after shrinking in the first quarter.
The IHS Markit composite purchasing managers' index rose to 53.8 in April from 53.2 in March and was slightly stronger than a preliminary reading of 53.7. A reading of 50 marks the difference between growth and contraction.
April's result was the second month of growth as manufacturing and services industries expanded. The final services business activity index rose to 50.5 from 49.6 and beat a preliminary estimate of 50.3. Manufacturing output was broadly in line with the strong showing in March.
US markets had fallen overnight as Treasury Secretary Janet Yellen said "interest rates have to rise somewhat" to prevent the post-covid economy from overheating.
Shares in major mining firms including Rio Tinto, BHP and Anglo American were all higher as copper prices moved beyond $10,000 a tonne, the highest level in a decade, on higher demand and lower inventories.
German commercial kitchen equipment maker Rational AG topped the Stoxx 600, up almost 13% on signs of improvement in March with revenues, sales and orders all showing a turnaround.
Car maker Stellantis jumped 7% as the company reported a better-than-expected quarterly revenue but warned that a global shortage of semiconductors would affect production in the current quarter.
Danish facilities management firm ISS rose more than 9.3% as demand for its cleaning services during the pandemic helped an improved quarterly performance.
German logistics company Deutsche Post rose after on raising its operating profit forecast for 2021, while Danish shipping company Maersk also gained as it forecast “exceptionally strong” first quarter performance to continue for the rest of the year.