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European stocks bounce as earnings, data spur recovery hopes

Credit: REUTERS/STAFF

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.

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Copper rally lifts miners

STOXX 600 earnings to jump 83.1% in Q1

EZ service sector activity expands in April-PMI

Adds comment, updates prices

May 5 (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 STOXX 600 index .STOXX rose 1.3%, wiping out almost all of its 1.4% loss on Tuesday, with the German DAX .GDAXI jumping 1.3% and UK's FTSE 100 .FTSE gaining 1.1%.

Big UK miners, including Rio Tinto RIO.L, BHP Group BHPB.L and Anglo American AAL.L, rose about 3% each as copper 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 .SX8P 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 AAPL.O and Amazon AMZN.O amid concerns over rising interest rate and uncertainty over an upcoming jobs report. .N

"Yesterday's sell-off in equities is a reminder that valuations in markets are tight," Unicredit analysts said in a note. They, however, pointed out that earnings season continued to be supportive of risk appetite.

German logistics company Deutsche Post DPWGn.DE rose 2.6% on raising its operating profit forecast for 2021, while Danish shipping company Maersk MAERSKb.CO 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 STLA.MI 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 .SXAP lagged their cyclical counterparts, rising only 0.3%, as Daimler DAIGn.DE slipped after Japan's Nissan Motor 7201.T said it was selling its roughly 1.5% stake in the German carmaker.

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

Delivery Hero DHER.DE 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.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D'Silva)

((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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