Europe Markets: European stocks and U.S. equity futures post modest gains after record session on Wall Street

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In this file photo taken on March 23, 2020 The Wall Street sign is seen on March 23, 2020 in New York City.

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European stocks and U.S. equity futures posted modest gains on Wednesday, the day after investors pushed the Dow Jones Industrial Average to a fresh all-time high and ahead of an American holiday.

The Stoxx Europe 600 index SXXP, -0.28% rose 0.2% to 393.22 after gaining 0.9% on Thursday. The German DAX DAX, -0.21%, the French CAC 40 PX1, -0.05% and the FTSE 100 UKX, -0.33% all rose 0.3% each.

U.S. stock futures YM00, -0.12% ES00, +0.00% NQ00, +0.29% rose modestly, with those for the Dow industrials up 49 points, a day after the index DJIA, +1.53% closed above the 30,000 landmark on Tuesday, driven by optimism over a COVID-19 vaccine and the inauguration of the administration of President-elect Joe Biden.

Investors appeared to be taking a breather ahead of the U.S. Thanksgiving Day holiday on Thursday, which will see those markets shut and then reopen for a half session on Friday.

“Yes, the presence of vaccine has answered many questions and we are in a much better situation today as compares to the beginning of this year. But, this does not change the fact that it is going to fair amount of time before things get back on track,” said Naeem Aslam, chief market analyst at AvaTrade, in a note to clients.

“This means that optimism spurred by vaccine and political development may be a little too much and the reality is that the recovery path is still full with obstacles,” he said.

French President Emmanuel Macron said the government will lift a national lockdown on December 15, in an address to the nation on Tuesday evening. Some shops could open as soon as Saturday, but other restrictions will stay in place to avoid another wave of the virus, he said.

French officials imposed a fresh lockdown in late October to battle surging COVID-19 infections and hospitalizations.

European banks were in the spotlight after Yves Mersch, vice-chair of the European Central Bank’s supervisory board, told the Financial Times that eurozone banks may be allowed to resume dividend payouts in 2021 if their balance sheets are strong enough.

Banks were ordered to halt dividends and share buybacks as the pandemic began sweeping through Europe in March, and the ECB is expected to reach a decision on those payouts by year-end. Mersch noted that banks have been helped by relaxed standards and additional capital provided by regulators. But he said it would be “spurious or surprising” if banks used additional capital created by regulators to “enrich the shareholders.”

Shares of HSBC Holdings HSBA, +0.16% rose 1.3%, those of BNP Paribas BNP, -1.02% rose 1.5% and those of Société Générale GLE, -0.32% rose 1.4%.

Read: The ECB may loosen its dividend ban, so Eurozone banks should narrow the gap with UBS, Goldman Sachs says

Shares of United Utilities UU, +4.32% climbed 4.6%, and were among the Stoxx 600’s best performers after the water company posted an improved first-half profit. Underlying profit slipped due to a new regulatory cycle that reduces bills for customers and the pandemic hit consumption.

Melrose Industries MRO, +4.16% said performance for the four months ended Oct. 31 has been in line with the top end of the board’s expectations, though it cautioned against making 2021 forecasts, given market uncertainty.

The turnaround specialist noted a faster-than-expected recovery in automotive markets beginning in the summer. Shares rose 5%, also a top performer for Wednesday.

Shares of Rotork ROR, -0.25% climbed 4.7% after the industrial flow-control equipment manufacturer said it expects 2020 adjusted operating profit to be at or slightly above the top end of market expectations.

Shares of Babcock International BAB, -5.63% tumbled over 6% after the U.K. engineering company and a key contratcor for the government reported a lower profit for the first half of fiscal 2021 after booking higher costs.

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