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 longterm 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.

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.

MSCI’s index of developing world stocks rose about 0.3%, supported chiefly by Asian equities after data showed Chinese factory activity expanded at a faster-than-expected pace in June. The index marked its best quarterly gain since 2009 in the second quarter, as improving economic indicators and the lifting of some coronavirus-related curbs boosted risk appetite.