European shares strengthen on recovery hopes, Germany leads gains

(Reuters) – European shares rose on Thursday, extending a rally for the fourth straight day, as investors were hopeful of a swifter global economic recovery, with German shares leading the advance among European Union members.

FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, January 26, 2021. REUTERS/Staff

The STOXX 600 index was 0.2% higher, while Frankfurt shares rose 0.4%.

Germany’s ruling coalition parties on Wednesday agreed a batch of additional measures to support those hit hard financially by the COVID-19 pandemic.

“Last night’s measures are another band aid for the most hit sectors and people,” said Carsten Brzeski, global head of macro at ING.

Milan’s FTSE MIB index edged 0.1% lower in early trading, cooling from an over 2% gain in the previous session.

Former European Central Bank chief Mario Draghi on Wednesday took on the task of forming a new government to end Italy’s political crisis, tackle the coronavirus emergency and overcome deep economic recession.

Global markets remained hopeful after Democrats pushed ahead on Wednesday with a manoeuvre to pass U.S. President Joe Biden’s $1.9 trillion COVID-19 relief package without Republican support.

With the reporting season in full swing, market participants also looked at earnings from European companies.

Deutsche Bank AG’s shares rose 1.2% after the German lender swung to a small annual profit in 2020, its first since 2014, on the back of strong gains at its investment banking division.

Securitas AB fell 2.1% after the world’s biggest security services group posted a bigger drop than expected in fourth-quarter profit.

Unilever fell 3.4% after the consumer goods giant reported underlying sales growth for the fourth quarter that was in line with estimates.

Shell rose 0.7% after the company boosted its dividend again, even as 2020 profit dropped to its lowest in at least two decades.

Bayer AG jumped 4.7% after the German company struck a $2 billion deal to resolve future legal claims that its widely used weedkiller Roundup causes cancer.

The European blue-chip index was flat, while the euro zone blue-chip index rose 0.2%.

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