European markets mixed as investors digest data, Covid surge; Telecom Italia up 9% – CNBC

LONDON — European stocks were mixed on Wednesday as investors monitored the latest data out of the euro zone and the region’s latest Covid surge.

The pan-European Stoxx 600 slipped fractionally below the flatline by mid-morning, having opened in positive territory. Travel and leisure stocks dropped 2.4% while utilities gained 0.7%.

European markets continue to monitor the acute Covid crisis in the region this week, with more countries considering stricter restrictions and partial lockdowns to curb rising infections.

Germany is expected to make a decision on stricter measures on Wednesday amid a surge in cases there, and France recorded more than 30,000 new daily infections on Tuesday for the first time since August.

Investors are also digesting the latest business activity data from the region; European stocks retreated on Tuesday, closing lower, despite data showing that euro zone business activity grew unexpectedly in November.

IHS Markit’s flash composite purchasing manager’s index (PMI), a useful gauge of economic health, climbed to 55.8 in November from 54.2 in October, greatly outstripping expectations in a Reuters poll of economists for a drop to 53.2.

However, optimism about the immediate future for economic activity declined. It came amid a fresh wave of Covid-19 infections across the region and surging prices, and the outlook deteriorated for December.

On Wednesday, Germany’s Ifo business climate index fell in November, dropping to 96.5 from October’s 97.7, as supply chain bottlenecks, inflation and the prospect of further Covid measures continue to darken the short-term outlook for Europe’s largest economy.

The business conditions survey fell to 99.0 this month from 100.2 in October, while business expectations dropped to 94.2 from 95.4.

Elsewhere overnight, U.S. stock futures pointed to a negative open after tech shares sold off for the second day in a row, pressured by rising rates that gave a boost to energy and financial stocks. Meanwhile, shares in Asia-Pacific were mixed in Wednesday trade, with Japanese stocks leading losses regionally.

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Earnings before the bell came from Johnson Matthey, Virgin Money and United Utilities.

In terms of individual share price movement, Telecom Italia jumped 9% following a report suggesting U.S. private equity giant KKR is considering upping its buyout bid for Italy’s largest phone company.

At the bottom of the European blue chip index, British genetics firm Genus plunged 15% after its trading update, which indicated that full-year profit before tax would likely be moderately lower than previous estimates.

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European markets mixed as investors digest data, Covid surge; Telecom Italia up 9% – CNBC

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