Europe midday: Cineworld shares soar on buyout rumours
European stocks continued to power ahead at midday driven by gains in leisure and stocks despite continuing gloom in the sector on fears of a second wave of Covid-19, while Cineworld stock soared on buyout speculation.
The pan-European STOXX 600 index pushed on from its positive morning session, rising 2% to 372.3 points. All major bourses were higher, with the bullish mood even allowing London’s FTSE 100 to shrug off the biggest rise in the number of jobless since 2009.
Movie house operator Cineworld was the standout gainer, up almost 40% as a US court ruling fuelled renewed takeover speculation, with traders suggesting the group could be taken private.
A judge in New York last Friday agreed to terminate the Paramount Decrees — a set of competition rules introduced in the late 1940s that were designed to end Hollywood’s grip on the production, distribution and exhibition of blockbuster movies.
Cineworld runs more than 500 US sites under the Regal brand, which it bought for £2.7bn two years ago, and could itself be taken over by a big American studio.
Travel shares were up, with airline group IAG, holiday operator TUI and cruises company Carnival all among the top gainers for the day, with sentiment running against the grain of announcements within the sector.
Carnival announced more cancellations at its Seabourn and P&O divisions, although its Italian Costa unit announced a return to cruises next month after Covid-19 safety measures were received government approval.
TUI also announced cancellations to Spain as the UK government ordered quarantines on passengers arriving from the region, while IAG unit British Airways is under fire over its plan to fire more than 10,000 staff.
Shares in German meal-kit delivery firm HelloFresh were higher after it raised its full-year guidance after second-quarter sales and core profit soared on the back of strong demand for food deliveries during coronavirus lockdowns in the US and other markets.
The company saw increased demand amid a resurgence the virus in some markets and higher retention of its customers.
Car makers were also a driver of sentiment after data showed July auto sales in China soared 16.4% year on year, as consumer demand in the world’s biggest vehicle market picked up after the coronavirus lockdown.