European shares extended gains at midday on Monday on hopes that talks to end the war in Ukraine would make progress, despite repeated Russian shelling of several cities in the besieged country.
The Stoxx 600 index was up 0.76% in early deals after a mixed session in Asia. Germany’s DAX was a standout performer, up 1.93% as domestic February wholesale prices rose 1.7% versus January and were up 16.6% year on year.
Chinese stocks fell overnight as domestic Covid-19 cases jumped to a two-year high, prompting Beijing’s technology and financial hubs to impose restrictions. The Shanghai Composite index fell 2.6% and Hong Kong’s Hang Seng slumped 5.97%.
Investors were also eyeing US producer price index data expected to show an annual 10% jump on Tuesday and a Bank of England decision on interest rates.
The Stoxx rallied last week when Russian President Vladimir Putin on Friday signalled a positive shift in talks with Ukraine. Officials were set to resume discussions on Monday, even as Russia attacked a base near the Polish border.
Oil prices dipped on as traders clung to hopes that peace talks between Russia and Ukraine would make headway having surged to record highs at the outbreak of war, with benchmark Brent crude touching nearly $140 a barrel at one point.
Benchmark Brent crude was trading 4% lower at $108.15 a barrel while West Texas Intermediate was down 5% at $104 a barrel.
In equity news, Volkswagen shares were up 4.83% as the automaker posted higher operating profits. Porsche shares were up on the sentiment, along with tyre makers Continental and Nokian.
Shares in UK house builder Persimmon surged after a media report suggesting that the cost for cladding remediation work could be much less than the £4bn initially estimated.
French power utility EDF slipped after it issued a warning on its outlook for the current year, citing wholesale energy price caps and lower nuclear output problems.
Shares in Dutch tech investor Prosus, which owns a stake in China’s Tencent, were down 10%, reflecting weakness in Hong Kong-listed tech giants on regulatory concerns.
Airline shares were all higher as they continued their roller-coaster ride amid the Ukraine conflict, with IAG and easyJet both flying higher.
Telecom Italia shares climbed 5% after it said it would start formal talks with KKR to assess the US fund’s potential €10.8bn offer for Italy’s biggest phone group.
Mining stocks fell on weaker base metals prices, with Anglo American, Glencore, Rio Tinto and Antofagasta all lower.
