By Peter Nurse
Investing.com - European stock markets traded mixed on Wednesday, with the U.K. market outperforming amid signs of economic recovery despite the country suffering the worst contraction of any major economy due to the coronavirus.
At 3:45 AM ET (0745 GMT), the DAX in Germany traded 0.2% lower, the CAC 40 in France rose 0.2% and the U.K.'s FTSE index was up 0.6%.
The U.K. officially entered recession Wednesday for the first time since the financial crisis in 2008 after the Office for National Statistics confirmed that the U.K. economy shrank by 20.4% in the second quarter, after dropping by 2.2% in the first. The U.K. had locked down later than many of its European peers, concentrating the impact on output more in the second quarter. In addition, its economy has a higher share of services - which have been particularly vulnerable to lockdowns - than for example Germany and France.
Helping the tone was the marked improvement in activity in June as GDP rose 8.7% month-on-month as lockdown restrictions eased.
Across the Atlantic, there remains uncertainty over whether U.S. lawmakers will agree to an additional round of big fiscal stimulus, after Senate Majority Leader Mitch McConnell stated late Tuesday that talks were at a stalemate.
Barring what now seems an unlikely bipartisan deal, the U.S. economy could be left with the measures proposed by U.S. President Donald Trump via executive orders to bypass Congress over the weekend. These only envisage a reduced level of support through enhanced jobless benefits.
In corporate news, Sunrise Communications (SIX:SRCG) stock surged 26% after Liberty Global (NASDAQ:LBTYA) launched a takeover offer for the Swiss telecoms group in a deal valued at 6.8 billion Swiss francs ($7.40 billion
Just Eat Takeaway.com rose 4% after the online food ordering company said the coronavirus pandemic led to a surge in orders in the first half.
Admiral Group rose 4.8% after the insurer declared a deferred special dividend from 2019, reporting a 31% rise in first-half pretax profit, while fashion retailer ASOS climbed 8% as it forecast strong full-year sales and profit numbers.
E.ON stock fell 1% after Germany’s largest energy group cut its outlook for the current year as the coronavirus crisis hit its networks and retail business in the second quarter.
U.S. crude futures traded 0.9% higher at $41.98 a barrel, while the international benchmark Brent contract rose 0.9% to $44.91. The OPEC monthly report and official U.S. inventory data are both due later.
Elsewhere, gold futures rebounded from overnight lows to be down only 0.3% at $1,940.95/oz. EUR/USD traded flat at 1.1738.