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26 Jan 2021 | 11:18

Europe midday: Shares rebound despite Covid fears, EU threat over vaccines

(Sharecast News) - European shares rebounded strongly at midday as investors shrugged off concerns over tighter coronavirus travel restrictions and the slower pace of vaccine rollouts across the Continent. The pan-European STOXX 600 index rose 0.79%, extending morning gains. The UK FTSE rose 0.71% despite official data showing British redundancies at a record high, with the unemployment rate hitting 5% for the first time since mid-2016.

"Yet that rise in the unemployment rate still leaves it short of the 5.1% forecast. The average earnings index surged past estimates, at 3.6% against the 2.9% estimated. And, in the most recent piece of data, December's claimant count change reading came in at just 7k, a fraction of both the 38.1k seen the month prior, and the 47.5k analysts had expected," said Spreadex analyst Connor Campbell.

"Concerns over the length of the UK's current lockdown remain an underlying issue for the index, especially since the Conservative party seem to have shifted their strategy away from the make-and-then-break promises policy of 2020."

Britain was expected on Monday to announce a mandatory 14 day quarantine for all arriving passengers.

In Brussels, the European Union hit out at AstraZeneca, claiming the company, which has developed a Covid-19 vaccine with the University of Oxford, had failed to guarantee delivery of vaccines without a valid explanation.

It threatened to impose export controls imminently on vaccines made within 27 member bloc, which is behind the UK and US in rolling out vaccines, as the virus continues to spread and new variants appear.

Italy's FTSE MIB was up 0.84% with Prime Minister Giuseppe Conte set to resign later on Tuesday on hopes President Sergio Mattarella will give him a mandate to form a new government with broader backing in parliament.

In equity news, shares in Spanish energy company Naturgy Energy Group soared after infrastructure investment firm IFM offered to buy a 22.69% stake in the company. IFM is offering €23 euros per share, a 19.7% premium over from Naturgy's closing price of €19.2 euros on January 25.

Shares in wealth manager UBS gained as high levels of client activity helped it record a 137% rise in net profit.

Swedish buyout group EQT jumping 9.7% after it signed a deal to buy global real estate investment manager Exeter Property Group for $1.87bn.

Aircraft engine maker Rolls-Royce was down 4.4%, having slumped almost 10% in early trade, as the company revised down its 2021 outlook for engine flying hours as Covid travel restrictions and new strains of the virus continue to batter the travel industry.

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