Markets

European shares pause after three-day rally

But markets remain hopeful after Democrats push ahead with US relief package

Photograph: iStock

Thu Feb 4 2021 - 08:43

European shares were flat on Thursday after a three-day rally on hopes of a swifter global economic recovery and an upbeat sentiment in Italy as former European Central Bank chief Mario Draghi took on the task of forming a new government.

The Stoxx 600 index was flat in early trading, while Milan’s FTSE MIB index fell 0.2 per cent.

Markets remained hopeful after Democrats pushed ahead on Wednesday with a maneuver to pass US President Joe Biden’s $1.9 trillion Covid-19 relief package without Republican support.

Among early gainers, Bayer AG jumped 5.5 per cent after the German company struck a $2 billion deal to resolve future legal claims that its widely used weedkiller Roundup causes cancer.

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Deutsche Bank’s shares rose 0.6 per cent after the German lender swung to a small annual profit in 2020, its first since 2014, on the back of strong gains at its investment banking division.

The European blue-chip index fell 0.2 per cent, while the euro zone blue-chip index rose 0.1 per cent.

British shares rose on Thursday as a set of positive earnings boosted hopes of an economic recovery, with investors looking to Bank of England’s policy meeting later in the day.

The BoE is expected to keep its benchmark interest rate on hold at 0.1 per cent and refrain from a further increase in its bond-buying programme, which has doubled over the past year. The blue-chip Ftse 100 index rose 0.2 per cent, with travel and mining stocks leading the gains, while the mid-cap index added 0.3 per cent. BT, Britain’s biggest broadband and mobile operator, climbed 2.7 per cnet and was the top gainer on the Ftse 100 index after saying it remained on track for the year. – Reuters

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