European shares start new quarter with subdued gains

European shares inched higher at the start of a new quarter on Wednesday, as improving euro zone data added to hopes of a quicker economic rebound, but surging U.S. coronavirus cases held optimism in check. The pan-European STOXX 600 index rose 0.3% after closing out its best quarterly gains since March 2015 in the previous session.


Reuters | Updated: 01-07-2020 14:27 IST | Created: 01-07-2020 14:27 IST
European shares start new quarter with subdued gains

European shares inched higher at the start of a new quarter on Wednesday, as improving euro zone data added to hopes of a quicker economic rebound, but surging U.S. coronavirus cases held optimism in check.

The pan-European STOXX 600 index rose 0.3% after closing out its best quarterly gains since March 2015 in the previous session. Trading in some European markets, including Germany's DAX and Austria, was hit by a "technical issue" with the Frankfurt-based cash market system Xetra, a Deutsche Boerse spokesman said.

Volumes on DAX was stuck at 0.15% of the long-term daily average, while the broader STOXX 600 saw 3% of daily average go through at 0733 GMT, Refinitiv data showed. Fuelling hopes of a steady recovery from the coronavirus crisis, data showed the number of people out of work in Germany rose far less than expected in June.

The final reading of IHS Markit's euro zone manufacturing Purchasing Managers' Index (PMI) showed the downturn in the bloc last month was not as bad as initially thought. The index moved closer to the 50-mark separating growth from contraction in June. However, investors remained worried as the United States on Tuesday recorded its biggest single-day spike since the pandemic began, dimming hopes that the economic pain had passed.

"Q3 begins with news of a record increase in new daily COVID-19 cases in the U.S., and the impressive Q2 performance numbers will be difficult to sustain," Ian Williams, a strategist at Peel Hunt wrote in a morning note. "Policy support remains powerful but the shape of the recovery across the major economies is highly uncertain."

Energy firms such as BP and Royal Dutch Shell rebounded from losses in the previous session as oil prices rose after a report showed crude stockpiles in the United States posted a bigger drop than expected. Swiss speciality chemicals maker Clariant jumped 9% as it completed the $1.6 billion sale of its masterbatches unit to PolyOne Corp, allowing the payment of a special dividend amounting to $3 per share.

Banca Monte dei Paschi di Siena rose nearly 2% after a report that the Italian bank is exploring merger options, including with Banco BPM.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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