- The pan-European Stoxx 600 closed up 0.1% after choppy trading earlier in the session.
- Germany is expected to make a decision on stricter Covid curbs Wednesday amid a surge in cases.
- German political parties agreed to form a three-way coalition after almost two months of talks.
LONDON — European stocks eked out small gains on Wednesday as traders digested a fresh batch of economic data and monitored the region’s latest Covid surge.
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The pan-European Stoxx 600 closed up 0.1% after choppy trading earlier in the session. Telecoms shares rose 1.2% to lead the gains while autos stocks sank 1.5%.
European investors continue to monitor the acute Covid crisis in the region this week, with more countries considering stricter restrictions and partial lockdowns to curb rising infections.
Germany is expected to make a decision on stricter measures on Wednesday amid a surge in cases there, and France recorded more than 30,000 new daily infections on Tuesday for the first time since August.
In political news, German parties agreed to form a three-way coalition after almost two months of talks. The deal will see Olaf Scholz, the center-left Social Democratic Party’s candidate, become Germany’s next chancellor, replacing Angela Merkel who has led Germany for 16 years.
Investors are also digesting the latest business activity data from the region; European stocks retreated on Tuesday, closing lower, despite data showing that euro zone business activity grew unexpectedly in November.
IHS Markit’s flash composite purchasing manager’s index (PMI), a useful gauge of economic health, climbed to 55.8 in November from 54.2 in October, greatly outstripping expectations in a Reuters poll of economists for a drop to 53.2.https://art19.com/shows/4420ff26-c17c-4c28-a654-a663d4bcbf60/episodes/5909b538-aceb-4c75-b0ea-267c4fac27c0/embed
However, optimism about the immediate future for economic activity declined. It came amid a fresh wave of Covid-19 infections across the region and surging prices, and the outlook deteriorated for December.
On Wednesday, Germany’s Ifo business climate index fell in November, dropping to 96.5 from October’s 97.7, as supply chain bottlenecks, inflation and the prospect of further Covid measures continue to darken the short-term outlook for Europe’s largest economy.
The business conditions survey fell to 99.0 this month from 100.2 in October, while business expectations dropped to 94.2 from 95.4.
On Wall Street, stocks were mixed as higher bond yields and poor retail earnings weighed on sentiment.
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Earnings before the bell came from Johnson Matthey, Virgin Money and United Utilities.
In terms of individual share price movement, Telecom Italia jumped 15.6% following a report suggesting U.S. private equity giant KKR is considering upping its buyout bid for Italy’s largest phone company.
At the bottom of the European blue chip index, British genetics firm Genus plunged 10% after its trading update, which indicated that full-year profit before tax would likely be moderately lower than previous estimates.
Source : CNBC