European stocks held gains at midday on Wednesday as upbeat news from Royal Dutch Shell and UK housebuilder Redrow helped lift sentiment and investors eyed the latest set of policy minutes from the US Federal Reserve.
The pan-European Stoxx 600 index was up 0.46% after a fall on Tuesday due to a sharp drop in US and euro zone bond yields sparked by fears over the global economic recovery.
Investors were also eyeing the US Federal Reserve’s policy minutes later in the day for any indication on asset purchase tapering.
Germany’s DAX outperformed with a rise of 0.81%, despite data showing a contraction in industrial production after Tuesday’s unexpected 3.7% decline in factory orders.
In the UK, June average house prices fell 0.5%. “We are beginning to see some concern that the fading benefits of the stamp duty holiday could soon see demand grind to a halt,” said IG analyst Joshua Mahony.
“That being said, much of that decline was driven by the midlands and London, with the rest of the country gaining ground throughout June. The past year has seen such huge numbers of home moves, bringing reservations around how much demand there will be for housebuilders going forward.”
In equity news, shares in Redrow topped the Stoxx, up 4.86% as the housebuilder said 2022 revenues should exceed £2bn.
Shell shares rose 2.48% after it said it would boost its returns to shareholders via share buybacks or dividends.
The oil major said it would increase distributions to between 20% and 30% of cashflow from its operations thanks to a rebound in its core business and an improving outlook.
Rival BP gained 2% on the back of the news, with the sector generally also up on higher oil prices. Brent futures rose 0.8% in early trade to reach $75.14 a barrel.
Miners BHP, Rio Tinto and Antofagasta were all up as copper and iron ore prices rose.
German software company SAP was up after an upgrade to “buy” from Bank of America.
On the downside, 888 Holdings was weaker even as it said it expects adjusted annual core profit to be slightly higher despite higher costs and regulatory changes. Sector peer Entain was also lower.
