European Stocks Pause near Record High, UK Outperforms

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European stocks hovered near record highs on Wednesday supported by gains in real estate and telecom shares, while optimism over speedy vaccination drives and a weaker pound helped UK equities outperform.

The panEuropean STOXX 600 index was flat, trading just below the record closing high of 435.26 points on Tuesday.

UKs exporterheavy FTSE 100 gained 0.7 as a weaker pound lifted the dollar earners, while the domestically focussed midcap index hit a record high as Britain began the rollout of Modernas COVID19 vaccine.

A rebound in economically sensitive sectors such as banks, energy and automakers pushed European stocks to prepandemic levels earlier this week, as investors bet on a strong global economic recovery, driven by vaccines and unprecedented stimulus measures.

A final reading of IHS Markits Purchasing Managers Index showed euro zone business activity returned to growth in March, underpinned by a record expansion in the manufacturing sector and as the service industry coped with new lockdowns better than expected.

There is a case to be made in the second half of the year when Europe really has its moment, because it has lagged the rest in its recovery. Theyve finally managed to ramp up vaccine production and distribution, said Julien Lafargue, head of equity strategy at Barclays Private Bank.

With earnings season set to kick off this month, investors are hoping for a strong recovery.

Profits for companies on the STOXX 600 are expected to jump 47.4 in the…

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