European shares held gains on the last day of trading before the Easter break, as new US plans for massive infrastructure spending offset worries about a third Covid lockdown in France, but IT group Atos slumped after it flagged accounting problems at two US units.
The pan-European Stoxx 600 index was up 0.39% by lunch with most major bourses higher. Wall Street stocks were on the rise overnight as US President Joe Biden unveiled a $2.3trn spending plan on roads, railways, broadband, clean energy and semiconductor manufacture.
This spurred a rise in European chip companies including ASML, ASMI and Infineon Technologies. The sector was also boosted by an upbeat revenue forecast from US chipmaker Micron Technology.
Sentiment was also lifted by positive survey data in the eurozone, where the Purchasing Manager Index (PMI) posted a rapid increase in March.
The PMI surged to 62.5 in March from 57.9 in February, according to IHS Markit, as the eurozone’s manufacturing economy “performed extremely strongly” last month.
“The index has now registered above the 50.0 no-change mark that separates growth from contraction for nine months in succession,” IHS said.
Neil Wilson at Markets.com said global manufacturing activity “is starting to look good”.
“France’s March PMI showed the sharpest rise in manufacturing output since September 2000, albeit before the nation’s third lockdown was announced,” he added. “Italy’s factory activity has grown at the fastest pace in over 20 years.”
“Inflationary pressures were also evident as the scarcity of raw materials forced up cost burdens at the fastest rate since May 2011. The rate of inflation for prices charged to consumers was the strongest since June 2011. The Chicago PMI yesterday hit the best in two and a half years.
“The Bank of Japan’s headline Tankan index for big manufacturers’ sentiment improved to +5 in March from -10 in December. China’s manufacturing recovery continues, albeit at a slower pace last month.
Shares in UK fashion retailer Next rose 3% after the company lifted annual profits guidance on the back of soaring online sales in the first eight weeks of the current fiscal year while 2020/21 profits were halved due to the pandemic.
Atos slumped more than 13% after the French IT group reported accounting problems at two US units. It said the errors were not “material” to its 2020 financial statements, but auditors found “several matters relating to internal control weaknesses over financial reporting process and revenue recognition”, the company said.
