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European shares recovered from early morning drop to trade sharply higher, despite no clear outcome in the US presidential election as of yet and weak industry data across the euro zone suggesting a double dip recession.
With the result of the White House vote still hanging in the balance and investors watching the remaining key states, the pan-European Stoxx 600 index was up 2.05% to 363.31 with all of the Continent’s major bourses in the green.
“Financial markets, which had been hoping for a swift outcome after the uncertainty of the last few weeks are currently taking the failure of the Democrats to open up a clear lead in their stride, however that could change if we don’t start to see a clear outcome by the end of the week,” said Michael Hewson at CMC Markets.
“It also looks highly unlikely that the Democrats will gain control of the Senate, which they had hoped would give them a clean slate and free rein to unleash a multitrillion dollar fiscal stimulus plan.”
October services PMIs showed a stall in recovery as lockdown measures and the second Covid-19 wave hit the heavyweight services sectors. In Spain services activity slipped back to 41.4 from 42.4, while in Italy the picture worsened to 46.7, while France and Germany slipped back to 46.5 and 49.5 respectively.
In equity news, banks were on the back foot as investors took profits after several days of gains. Banco Bilbao Vizcaya Argentaria, HSBC and Standard Chartered were all lower.
Royal Mail shares jumped after JPMorgan raised its price target to 374p, and upgraded the shares to overweight.
BMW shares slipped after third quarter results missed expectations, though the company still affirmed its full year profit forecast.
Shares in UK retailer M&S were up despite the company falling to its first ever loss for the first half of the year. This was slightly better than expected, largely due to a big contribution from the Ocado side of the business which saw a share of net profit of £38.8m.
