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Europe midday: Autos drive shares on as markets hold gains

By Frank Prenesti

Date: Friday 23 Jul 2021

Europe midday: Autos drive shares on as markets hold gains

(Sharecast News) - European shares started the final session of the week higher, boosted by auto stocks and the European Central Bank promise to continue stimulus.
The pan-European Stoxx 600 index was up 0.85% at midday with all major regional bourses in the green.

Investors were digesting official UK data that showed a rise in retail sales rose between May and June, helped along by the European football tournament. Sales were up 0.5%, coming in a touch above consensus expectations for 0.4% growth. Compared with their pre-pandemic February 2020 levels, sales were 9.5% higher.

In other economic news, euro zone business activity expanded at its fastest monthly pace in over two decades in July, IHS Markit's flash survey showed, but fears of another wave of infections hit business confidence.

German Purchasing Managers' Index (PMI) hit its highest level in nearly a quarter of a century, creating inflationary bottlenecks.

In equity markets, Ultra Electronics surged after the defence company said it was minded to recommend a £2.58bn takeover bid from Cobham to shareholders. Cobham, owned by US private-equity firm Advent International, has offered £35 a share, a 42% premium to Ultra's share price of £24.70 on Thursday.

Telecoms operator Vodafone rallied after it reported a rise in first-quarter revenue as European and African services returned to growth.

Shares in French car parts maker Valeo jumped 7.5% after it posted higher first-half sales and profit, and said it expected the shortage of key technology chips to ease. Peers Faurecia, Continental and Daimler and were all higher on the news.

Rafale jets maker Dassault Aviation climbed 5% on reporting higher sales and profits in the first half of the year.

Norwegian renewables energy firm Scatec fell to the bottom of the Stoxx, down 17% despite a rise in second quarter earnings.

Danske Bank slid 3.5% as it second-quarter return on equity declined to 6.5%, down from 7.5% in the first quarter and well below the level of its Nordic peers.

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