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European shares advanced on Tuesday, with housebuilders leading the market higher following a solid update from Persimmon, while miners bounced back from sharp declines in the previous session.
Persimmon rose more than 4 per cent after Britain’s second largest housebuilder said its reservation rate had risen an annual 17 per cent since the start of July. Some builders have warned the Brexit vote could slow the property market.
“The group’s interims have run out better than we anticipated,” Shore Capital analyst Robin Hardy said. “The statement is bullish and confident and again seeks to ... push the message that the Brexit result is set to have little or no impact on the new homes market.”
Persimmon’s peers were also in demand, with Taylor Wimpey and Barratt Developments and Bellway rising 4.0 to 5.7 per cent.
The European basic resources index rose 2 per cent as copper prices recovered. BHP Billiton, Glencore and Anglo American rose 2.4 to 3.1 per cent.
The pan-European STOXX 600 was up 0.8 per cent by 0834 GMT. Both Germany’s DAX and France’s CAC rose around 0.9 per cent, also helped by upbeat private sector surveys.
Activity in the French private sector accelerated to levels last seen just before militant attacks in Paris last November, while in Germany, growth slowed in August but remained robust overall, suggesting Europe's biggest economy was set to keep on expanding in the summer months.
A third survey showed private business activity in the euro zone was muted but stable in August, though factories may face a tougher September as new order growth stumbled.
UniCredit rose 4 per cent after sources told Reuters the chief executive of Poland’s biggest insurer PZU is to discuss buying the country’s second-largest bank, Bank Pekao SA, from the Italian bank.
That helped Italy’s FTSE MIB index gain 1.3 per cent, outpacing the wider European market.
Swiss PC accessories maker Logitech fell 2 per cent, the worst performer in the STOXX 600 index, after UBS cut its rating on the stock to “neutral” from “buy", citing the risk of sales growth setbacks.
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