European shares higher after four straight sessions of losses
European shares surged on Wednesday after losing for four straight sessions, as a sign of a recovery in global manufacturing activity drove gains in chemical and industrial stocks.
The pan-European STOXX 600 index rose 1.4% after losing more than 2% over the past four sessions. The chemicals and industrial goods sectors added about 2.1% and 1.7%, respectively. Positive manufacturing data from the euro zone, United States and China this week indicated that a recovery in the sector was under way.
A strong overnight close on Wall Street also helped as European technology stocks mirrored gains in their U.S. peers. But weak inflation data and the lack of clear progress against the pandemic augured an uneven economic recovery, fears of which have kept the STOXX 600 in a tight trading range since June.
Data on Wednesday showed that German retail sales fell unexpectedly in July, indicating that household spending in Europe’s largest economy was still on the lam from the coronavirus. But German stocks rose more than 1%. In corporate news, Barratt Developments Plc, Britain’s biggest housebuilder, surged more than 5% after it flagged an improvement in forward sales, despite reporting a near 30% fall in annual housing completions and revenue.
Belgian real estate firm Aedifica jumped 6% after it clocked strong rental income growth over the 12 months to June 30 and flagged little impact to its results from the pandemic. On the other hand, European banks lagged their peers, retreating slightly as uncertainty over the pandemic seemed likely to create a shaky credit environment.
Asian shares inched up on Wednesday following buoyant U.S. manufacturing indicators and a rally in U.S. tech shares, with investors also expecting more policy support from Washington. MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.25% while Japan’s Nikkei advanced 0.35%. Mainland Chinese shares slipped a tad, with bellwether CSI300 index giving up 0.3% on investor caution after having hit a fiveyear high earlier this week.