UPDATE 1-European stocks bounce as earnings, data spur recovery hopes
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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 rose 1.3%, wiping out almost all of its 1.4% loss on Tuesday, with the German DAX jumping 1.3% and UK’s FTSE 100 gaining 1.1%.
Big UK miners, including Rio Tinto, BHP Group and Anglo American, 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.
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 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 and Amazon amid concerns over rising interest rate and uncertainty over an upcoming jobs report.
“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 rose 2.6% on raising its operating profit forecast for 2021, while Danish shipping company Maersk 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 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 lagged their cyclical counterparts, rising only 0.3%, as Daimler slipped after Japan’s Nissan Motor said it was selling its roughly 1.5% stake in the German carmaker.
German fashion house Hugo Boss rose 4.2% as it saw first-quarter sales almost double in mainland China, and its casual business returned to growth.
Delivery Hero 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)