European Shares Extend Gains On Recovery Hopes

European shares were mostly higher on Thursday, extending a three-day rally on hopes of a swifter global economic recovery.

Sentiment was also underpinned after former European Central Bank chief Mario Draghi agreed to help form a new Italian government.

The monetary policy announcement and the quarterly economic and inflation projections are due from the Bank of England later in the day.

The central bank is expected to keep its interest rate unchanged near zero, avoiding a reduction to negative territory at the February meeting.

The bank is also set to maintain the size of quantitative easing at GBP 895 billion. The announcement is due at 7.00 am ET.

The pan European Stoxx 600 edged up 0.2 percent to 408.12 after gaining 0.3 percent on Wednesday.

The German DAX and France’s CAC 40 rose about 0.4 percent, while the U.K.’s FTSE 100 was marginally higher.

Swiss engineering company ABB lost 2.5 percent after it swung to a loss in the fourth quarter.

British housebuilder Barratt Developments jumped 2.9 percent after achieving “a fantastic first half performance,” according to its Chief Executive.

Consumer goods giant Unilever slumped 4.3 percent after its underlying sales rose 3.5 percent in the fourth quarter in line with estimates.

Bayer AG surged 5 percent after the German chemical company announced a formal agreement with plaintiffs’ class counsel on a class plan designed to manage and resolve future Roundup cases.

Deutsche Bank was moving lower despite the lender reporting a small annual profit in 2020, its first since 2014, on higher revenues and cost reductions at its investment banking division.

Semiconductor manufacturer Infineon Technologies was little changed in choppy trade after reporting higher revenue and net profit for the first quarter of fiscal 2021.

In economic releases, the construction Purchasing Managers’ Index for Germany fell to 46.6 in January from 47.1 in December due to a sustained downturn in work on commercial building projects.

French business managers forecast a strong rebound in investment expenditure this year, according to a survey, released by the statistical office Insee.

Managers forecast investment expenditure to rise 10 percent this year, reversing an estimated decline of 13 percent in 2020. Managers upgraded their forecast for 2021 by 6 points and that for 2020 by 1 point.

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