European stocks rebound on brightening outlook

LONDON: European equities rebounded Wednesday as investors focused on bright data and earnings, despite ongoing Covid fears.

London won 1.2 percent in late morning deals, while Frankfurt stocks jumped 1.3 percent and Paris gained 1.0 percent at around midday.

Oil prices also forged higher on hopes for a recovery in demand, but the euro nudged lower versus the dollar.

"European bourses are flying higher today, helped by strong earnings and accelerating business activity in the region," said OANDA analyst Sophie Griffiths.

"Corporate earnings gave investors further reason to cheer with big names such as Deutsche Post and Hugo Boss posting impressive numbers."

Eurozone economic activity accelerated somewhat in April, according to a key survey which sparked hope that the bloc would exit a double-dip recession.

IHS Markit's eurozone composite Purchasing Managers' Index (PMI), a key gauge of business activity, rose to 53.8 points in April from 53.2 in March, above the crucial 50-point level that indicates growth.

The survey data "provide encouraging evidence that the eurozone will pull out of its double-dip recession in the second quarter," said IHS Markit chief business economist Chris Williamson.

"A manufacturing boom, fuelled by surging demand both in domestic and export markets as many economies emerge from lockdowns, is being accompanied by signs that the service sector has now also returned to growth."

Official data last week showed that the eurozone economy fell into its second recession in less than a year in the first quarter, hit by slow vaccinations and pandemic lockdowns.

All three main European markets had fallen sharply on Tuesday on concerns over high valuations as investors reassessed recent bumper gains.

The mood also soured after Treasury Secretary Janet Yellen suggested that US interest rates might need to be increased as government spending measures fan inflation and the economy surges.

Yellen's remarks roiled Wall Street overnight and sent Asian indices mostly falling on Wednesday.

Her comments appeared to be a deviation from the united front top officials have put up in trying to reassure investors that the Federal Reserve's ultra-easy monetary policies will remain in place until the recovery is well on track.

In a pre-recorded conversation with The Atlantic, she said borrowing costs might have to be increased "somewhat" to temper inflation if President Joe Biden's latest spending plans -- which are worth more than $4 trillion -- are enacted and the economy heats up.

However, Yellen later clarified the comments, saying she was neither predicting nor suggesting the Fed tighten rates.

Key figures around 1015 GMT -

London - FTSE 100: UP 1.2 percent at 7,004.30 points

Frankfurt - DAX 30: UP 1.3 percent at 15,049.10

Paris - CAC 40: UP 1.0 percent at 6,311.44

EURO STOXX 50: UP 1.4 percent at 3,977.79

Hong Kong - Hang Seng Index: DOWN 0.5 percent at 28,417.98 (close)

Tokyo - Nikkei 225: Closed for a holiday

Shanghai - Composite: Closed for a holiday

New York - Dow: UP 0.1 percent at 34,133.03 (close)

Euro/dollar: DOWN at $1.1994 from $1.2014 at 2100 GMT

Pound/dollar: DOWN at $1.3880 from $1.3887

Euro/pound: DOWN at 86.41 pence from 86.51 pence

Dollar/yen: UP at 109.37 yen from 109.33 yen

Brent North Sea crude: UP 1.2 percent at $69.72 per barrel

West Texas Intermediate: UP 1.1 percent at $66.44 per barrel