UPDATE 2-European stocks bounce back from tech rout on strong data, commodities

  • Reuters
  • Stock Market News
UPDATE 2-European stocks bounce back from tech rout on strong data, commodities
Credit: © Reuters.

* Miners lead gains across Europe

* STOXX 600 earnings to jump 83.1% in Q1

* EZ service sector activity expands in April-PMI

* Construction and materials stocks at record high (Updates to market close)

By Sruthi Shankar and Ambar Warrick

May 5 (Reuters) - European stocks marked their best day in nearly two months on Wednesday, recovering from a sharp sell-off in the previous session as resource stocks hit a 10-year high, while data showed euro zone business activity picked up in April.

The pan-European STOXX 600 index .STOXX ended 1.8% higher, wiping out almost all of its 1.4% loss on Tuesday, when concerns over policy tightening in the United States had rattled high-value technology stocks.

European tech stocks .SX8P rose 2.7% after a 3.7% plunge in the previous session.

Europe's basic resources index .SXPP jumped 4.7% to a 10-year peak, with big London-listed miners leading gains as copper prices hit decade highs on optimism about a speedy recovery in the global economy. The index also marked its best day in nearly a year. MET/L

Oil and gas stocks .SXEP surged 3.2% in their best day since mid-February, as expectations of recovering demand benefited oil prices, while the construction and materials index .SXOP jumped 2.9% to a record high. O/R

"Data shows the vaccine run-rate in Europe is now picking up rapidly, European macro data is improving and the Q1 earnings season suggests corporates are able to deal with higher input costs," UBS analysts wrote in a note.

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. stocks have benefited from expectations of an economic recovery, with banks .SX7P , travel and leisure .SXTP and basic resources leading gains this year. A strong first-quarter earnings season has also helped sentiment.

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. cooking appliances maker Rational RAAG.DE jumped 12.7% to the top of the STOXX 600, after it posted better-than-expected first-quarter results. shipping company Maersk MAERSKb.CO was up 6.9% after it said it was expecting an "exceptionally strong" performance in the first quarter to continue for the rest of the year. STLA.MI rallied 7.0% after the carmaker reported better-than-expected quarterly revenue but warned that a global shortage of semiconductors would affect production this quarter more heavily. fashion house Hugo Boss BOSSn.DE rose 5.2% as it saw first-quarter sales almost double in mainland China, and its casual business returned to growth. Hero DHER.DE fell 4.2% as former owners of Woowa Brothers sold shares worth about 1.25 billion euros ($1.5 billion) in the online takeaway food company.

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