This content is not available in your region

European stocks pare losses as upbeat data lifts mood

European shares hit record high, bond yields fall as inflation fears ease
European shares hit record high, bond yields fall as inflation fears ease   -   Copyright  Thomson Reuters 2021   -  
By Reuters

<div> <p>By Sruthi Shankar and Shreyashi Sanyal</p> <p> – European stocks pared losses on Thursday as upbeat eurozone business growth data and strong U.S. jobs data lifted sentiment on a dull day of trading, while rating actions and ex-dividend trading knocked UK shares lower. </p> <p>The pan-European <span class="caps">STOXX</span> 600 index was down 0.1% after falling as much as 0.8% earlier in the session. The automobiles & auto parts and healthcare sectors gained, while miners fell the most. </p> <p>A host of British companies, including National Grid and Kingfisher, traded without entitlement for dividend, pulling UK’s <span class="caps">FTSE</span> 100 0.6% lower. </p> <p>After a record expansion in euro zone factory activity, <span class="caps">IHS</span> Markit’s final reading showed the bloc’s dominant service sector sprang back into life last month as restrictions eased. </p> <p>An index covering the service industry soared to a near three-year high of 55.2 from 50.5, just beating the 55.1 flash estimate.</p> <p>“The <span class="caps">PMI</span>s are consistent with the euro-zone’s economic recovery gathering pace in May,” said Jack Allen-Reynolds, senior Europe economist at Capital Economics. </p> <p>“Price pressures in the manufacturing sector are intensifying, but we still think that higher inflation will be temporary.”</p> <p><span class="caps">ADP</span> national employment data showed U.S. private payrolls increased by 978,000 in May, far more than expected, setting an upbeat tone for the closely watched official jobs report on Friday. Wall Street, however, fell after the report fanned inflation worries. [.N]</p> <p>A separate report indicated the number of Americans filing new claims for unemployment hit its lowest level since the start of the pandemic.</p> <p>Solid earnings, massive stimulus programmes and a pick-up in the pace of <span class="caps">COVID</span>-19 vaccination have helped pushed the <span class="caps">STOXX</span> 600 up 12.1% so far this year, while Wall Street’s S&P 500 has climbed 11.8%. </p> <p>French spirits group Remy Cointreau slipped 3.3% after hitting a record high as it topped estimates for full-year operating profit growth and handed investors an 85% dividend hike.</p> <p>Construction materials group Saint-Gobain gained 4.2% after forecasting record operating income and margin in the first half of the year.</p> <p>Britain’s biggest telecom group BT group fell 1.9% after Deutsche Bank downgraded the stock to “sell”, saying it is overvalued.</p> <p/> </div>