Europe midday: Shares extend gains on China rate cut, THG takeover talk
By Frank Prenesti
Date: Friday 20 May 2022
(Sharecast News) - European shares extended gains at midday on Friday, as Chinese central bank stimulus boosted sentiment after the previous session's heavy sell off.
The pan-European Stoxx 600 index was up almost 1.44% in early deals with all major bourses higher. Britain's mining-heavy FTSE 100 outperformed with a 1.8% rise.
China's central bank cut its five-year loan prime rate by a more-than-expected 15 basis points, which gave some cheer to investors.
In economic news, data showed UK retail sales recorded an unexpected increase in April, but the outlook for consumer spending continued to be pessimistic.
"Although at first glance this data looks positive, on closer inspection the three-month figures still point to a downtrend in retail sales since last summer with quarterly sales volumes falling by 0.3% versus the previous three months as affordability crisis weighs on consumer spending," said Victoria Scholar at Interactive Investor.
"March was a particularly bad month given the spike in petrol prices, partly accounting for the recovery this month. Plus inflation has caused the cost of goods to rise, pushing up retail sales as households are being forced to spend more for the same amount in the supermarkets and on other essential items."
In Germany, producer prices recorded a record rise in May as the Ukraine war pushed up energy costs.
In equity news, luxury goods maker Richemont slumped 12%, after the company said discussions about its "Luxury New Retail" partnership are "taking time".
Shares in online cosmetics seller THG soared by almost a third as property developer Nick Candy said he was is considering making an offer to buy the firm, formerly known as The Hut Group.
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