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European stocks bounce as earnings, data spur recovery hopes By Reuters

© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, May 4, 2021. REUTERS/Staff

(Reuters) – European stocks bounced back on Wednesday after a sharp selloff in the previous session, helped by gains in commodity and banking stocks, while optimism about a strong earnings season and a speedy economic recovery dominated the markets.

The pan-European index rose 1.3%, wiping out almost all of its 1.4% loss on Tuesday, with the German jumping 1.3% and UK’s gaining 1.1%.

Big UK miners, including Rio Tinto (NYSE:), BHP Group (NYSE:) and Anglo American (LON:), rose about 3% each as prices rose past a key psychological level of $10,000 a tonne, buoyed by optimism about a speedy recovery in the global economy. [MET/L]

Euro zone business activity accelerated in April as the bloc’s dominant services industry shrugged off renewed lockdowns and returned to growth, a survey showed.

European tech stocks rose 1.8% after a 3.7% plunge in the previous session.

Wall Street’s tech-heavy Nasdaq tumbled on Tuesday as investors pulled out of fast-growing companies such as Apple (NASDAQ:) and Amazon (NASDAQ:) amid concerns over rising interest rate and uncertainty over an upcoming jobs report. ()

“Yesterday’s sell-off in equities is a reminder that valuations in markets are tight,” Unicredit (MI:) analysts said in a note. They, however, pointed out that earnings season continued to be supportive of risk appetite.

German logistics company Deutsche Post (OTC:) rose 2.6% on raising its operating profit forecast for 2021, while Danish shipping company Maersk was up 3.4% after it said it was expecting an “exceptionally strong” performance in the first quarter to continue for the rest of the year.

European earnings are now expected to surge 83.1% in the first quarter, according to Refinitiv IBES data, up from last week’s forecast of 71.3% growth.

Stellantis rallied 2.7% after the carmaker reported better-than-expected quarterly revenue but warned that a global shortage of semiconductors would affect production this quarter more heavily.

Auto stocks lagged their cyclical counterparts, rising only 0.3%, as Daimler (OTC:) slipped after Japan’s Nissan (OTC:) Motor said it was selling its roughly 1.5% stake in the German carmaker.

German fashion house Hugo Boss rose 4.2% as it saw first-quarter sales almost double in mainland China, and its casual business returned to growth.

Delivery Hero fell 3.8% as former owners of Woowa Brothers sold shares worth about 1.25 billion euros ($1.5 billion) in the online takeaway food company.

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