Europe open: Shares muted as investors look for direction
European shares were subdued on Wednesday with a profit warning from Danish wind farm developer Oersted and worries over the rise in Covid-19 cases dragging on sentiment.
The pan-European Stoxx 600 index was flat in early trade, with Continental bourses muted. Germany’s DAX was slightly lower as the government said it would not be able to lift all coronavirus restrictions at the start of February as planned.
Investors were also eyeing US President-elect Joe Biden plans for a stimulus package ahead of his inauguration next week.
CMC Markets analyst David Madden said a “significant portion” of the share gains last week were on the back of stimulus hopes, “so one could argue that a lot of the good news has already been factored into the price of equities”.
“Biden is keen to invest in infrastructure and green energy but there are worries that the new administration will tighten regulation for the tech sector. Hence the NASDAQ 100’s underwhelming performance lately.”
In equity news, Oersted slumped 7.9% on warning a return to more normal wind speeds this year would hit operating earnings.
Carrefour gained 7.3% as Canadian convenience-store operator Alimentation Couche-Tard said it had approached Europe’s biggest retailer to discuss a merger. Shares in rival French supermarket Casino jumped 6.4%.
Shares in Spanish telecom company Telefonica rose 9% after it agreed to sell its mobile phone masts in Europe and Latin America to US-based telecom infrastructure operator American Towers for €7.7bn in cash.
Howden Joinery shares rose as the company lifted profits guidance after a better-than-expected performance in the final weeks of the year as locked down Britons spent more time improving their homes during the coronavirus pandemic.
Shares in online fast food ordering service Just Eat Takeway fell 4.5% despite reporting revenue rising by more than half in 2020 after UK delivery orders jumped almost fivefold in the fourth quarter.