(Reuters) -European stocks drifted higher on Monday after strong euro zone factory activity and German retail sales data highlighted a quick rebound in economic growth, with a largely buoyant earnings season adding to the upbeat mood.
Euro zone stocks index that includes markets in continental Europe rose 0.6%, while the German DAX was up 0.8% and France’s CAC 40 gained 0.6%.
UK markets were closed for May Bank holiday, keeping trading volumes light.
A survey showed euro zone factory activity growth reached a record high last month, while German retail sales posted their biggest year-on-year increase in March since the start of the COVID-19 pandemic.
“COVID-19 infections are stabilizing in Germany and the Netherlands, are on a downtrend in France and Italy, and appear to be under control in Spain,” analysts at BCA Research wrote in a note.
“Meanwhile, vaccinations are gathering pace across the euro area. This will allow authorities to ease restrictions and economic activity to accelerate.”
Europe’s benchmark STOXX 600 ended April with a 1.8% rise, and just below its all-time high as a pick-up in European vaccination drive and solid earnings reports boosted hopes of a strong economic recovery.
Nearly half of the STOXX 600 companies have reported so far, and 75% have topped profit estimates, as per Refinitiv IBES data. Normally, 51% beat earnings expectations.
German health technology company Siemens Healthineers rose 1.7% after it raised its full-year sales and profit forecast.
German airlines Lufthansa rose 2.1% following plans to offer flights to more than 100 holiday destination, Chief Executive Carsten Spohr told a German newspaper.
Wind turbine maker Siemens Gamesa fell 4.1% after it warned it could earn less this year than previously expected.
Dutch telecommunications company KPN NV fell 3.9% after it rejected unsolicited takeover offers from a private equity consortium comprising EQT AB and Stonepeak Infrastructure Partners and another from KKR.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva)