London’s benchmark was in the green, with the FTSE 100 2.04% firmer at 6,280.12
European shares continued their strong run on Wednesday as investors shrugged off UK recession woes and US fiscal stimulus worries as Liberty Global’s takeover of Sunrise Communications boosted sentiment.
The pan-European Stoxx 600 was up 1.14% at 374.99, while Germany’s DAX added 0.86% to 13,058.63, and the CAC 40 in Paris rose 0.9% to 5,073.31.
In London, the FTSE 100 was 2.04% firmer at 6,280.12.
The common currency was in a strong position by the early evening, with the euro last rising 0.47% against sterling to 90.4p, and advancing 0.45% on the dollar to $1.1793.
Growing uncertainty over whether the US Congress would sign off on more fiscal stimulus to follow President Donald Trump’s unilateral coronavirus-related spending measures was cast aside early in the session, setting the continent up for a rosy day.
London’s benchmark was in the green, despite the country going into its deepest recession since records began.
With the slump in GDP widely expected, economists were looking for indications of the shape and speed of any recovery, with hopes diminishing of a rapid bounce back.
The monthly data shows that a bounce back is underway and picked up steam in June, said Deloitte senior economist Debapratim De. However, its pace is consistent with a slow recovery – one that seems unlikely to be v-shaped. We expect economic activity to return to pre-pandemic levels only in the second half of 2022.
After a slightly sluggish start, equities got a large boost from the news that Liberty Global was taking over Sunrise Communications in a deal valuing the Swiss telecoms group at SFR6.8bn.
Sunrise shares rocketed 26.8% after the board recommended the all-cash offer of SFR110 per share.
Germany’s Freenet also benefited, as it holds around 24% of Sunrise and signed a binding, unconditional commitment to tender its shares at the offer price, with its stock ahead 16.77%.
Shares in M&G rose 4.46% as first-half profit more than halved as the savings and investments company suffered fund outflows and pressure on retail margins during the Covid-19 market disruption.
The FTSE 100 company declared an interim dividend of 6p a share and said it did not expect to increase the payout while the threat of Covid-19 remains.
Insurer Admiral was 5.75% higher after it reinstated its special dividend and reported a jump in first-half profit after motor claims fell as drivers stayed home during the coronavirus lockdown.
ABN Amro shares moved ahead 8.08% after the bank said it would end all trade and commodity financing after a string of losses, in a restructure that will see the Dutch firm cut 800 jobs with its corporate bank will retreating to northwest Europe, exiting the US, Asia, Australia and Brazil, except for clearing operations.
On the downside, shares in Danish services provider ISS were off 7.02%, after disappointing second-quarter results, as coronavirus lockdown measures and large numbers of people working from home hurt demand for its services, in particular catering.
ISS, which operates in 63 countries and provides services ranging from call centres to office cleaning, catering and security, posted an operating loss of DKR785M ($124.89M), down from a DKR1.42bn ($0.23bn) profit a year earlier.
Cineworld stock, which soared almost 30% on Tuesday as speculation it could go private or be taken over, gave back a chunk of those gains to close down 2.95%.
Cybersecurity firm Avast also fell, by 3%, as it said it said revenue growth would be at the upper end of guidance for the full year, but the spike in sales from people working at home during the Covid-19 lockdown would not be maintained.
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