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03 Mar 2021 | 18:16

Europe close: Shares end mixed despite better than expected survey data

(Sharecast News) - European shares finished on a mixed note on Wednesday as investors eyed new budget measures from the UK to help power the post Covid-19 pandemic recovery and shrugged off a survey that suggested the Eurozone might be in recession. The pan-European Stoxx 600 index slipped 0.29% to 412.03 with London's FTSE 100 outperforming the market, rising 0.57% to 6,651.17.

Most of the other regional bourses on the other hand finished lower, with Germany's Dax dipping 0.05% to 14,033.12, while the FTSE Mibtel ended down by 0.44% at 22,982.48.

Helping the Dax were reports the government was considering a loosening of coronavirus restrictions.

In parallel, the yield on the benchmark 10-year Bund was six basis points higher to -0.29%.

Investors appeared unperturbed by a survey indicating the eurozone economy was on course for a double-dip recession as the coronavirus pandemic takes its toll.

IHS Markit's composite purchasing managers' index - which measures activity in the manufacturing and services sectors - printed at 48.8 in February, up from the 'flash' estimate of 48.1 and January's reading of 47.8, but still below the 50.0 mark that separates contraction from expansion.

In London, Finance Minister Rishi Sunak unveiled his budgetary response to the pandemic.

"After a year of huge expense, Rishi Sunak finally laid out details on how the government would pay for the ongoing job and business support schemes," said IG senior market analyst Josh Mahony.

"Today's announcement heralds the first corporation tax since 1974, yet widespread anticipation of such a move coupled with a super deduction scheme has actually helped boost some stocks today. While many businesses will undoubtedly face higher taxes down the line, todays budget also provided a boost to investors after the chancellor extended the stamp duty holiday and froze capital gains."

In equity markets, travel & leisure stocks were the top performers, with British Airways and Iberia owner IAG, Premier Inn owner Whitbread, Cineworld and Wetherspoons all higher.

In equity news, Micro Focus shares surged 14% after the software company said it had signed a commercial agreement with Amazon Web Services.

Shares in UK insurer Hiscox Ltd plunged 12% as it swung to a huge loss for 2020 and continued to withhold its dividend.

Persimmon was also up after the housebuilder said forward sales were 15% higher than a year ago as it reported an 18% decline in annual profit. Rivals followed suit, with Taylor Wimpey and Barratt up, boosted also by expectations the chancellor will announce in his budget a mortgage guarantee scheme to help people with smaller deposits and possibly the extension of the stamp duty holiday.
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