(Reuters) – European shares hit fresh record highs on Wednesday, as a recent run of upbeat corporate earnings and a recovery in metal prices outweighed losses from a slide in oil stocks.

After rising as much as 0.2%, the pan-European STOXX 600 was flat in morning trade, with global shares also lingering at record peaks ahead of an expected tapering of pandemic-era stimulus by the U.S. Federal Reserve. [GLOB/MKTS]

“Hopes of a reacceleration in growth, a pullback in real bond yields, and a supportive earnings season in Europe, which has come in above the historical average, are contributing to the renewed market rally,” said Milla Savova, European equity strategist at Bank of America.

Savova, however, warned the recovery will prove short lived as major central banks consider scaling back on pandemic-era stimulus.

The STOXX 600 kicked off November with consecutive record highs as investors looked past concerns about rising inflation caused by supply-chain bottlenecks and labour shortages, with earnings season proving to be much stronger than expected.

Profits for Europe Inc are expected to jump 57.2% in the third quarter to 102.3 billion euros ($118.5 billion) from the same quarter last year, new Refinitiv IBES data showed, an improvement from last week’s 52% growth forecast.

Oil stocks were major decliners on the STOXX 600, falling 2.2%, as crude prices fell after data pointed to a surge in U.S. inventories and pressure mounted on OPEC to increase supply. [O/R]

However, a rebound in copper and other metal prices lifted the mining index by 1.5%.

Vestas, the world’s largest maker of wind turbines, also slumped 9.3% after posting a lower-than-expected third-quarter operating profit and trimming its full-year profit forecast.

BMW inched up 0.5% after the German automaker reported higher quarterly profit, but reiterated its warning on the global chip crunch.

Shares of Lufthansa jumped 5.2% after the airline posted a return to profit for the first time since the coronavirus crisis, boosted by the easing of travel restrictions.

German software firm TeamViewer surged 12% after confirming its preliminary third-quarter results and previously announced full-year forecasts.

French diagnostics specialist Biomerieux edged 2.9% higher after a Bloomberg report that it was exploring a potential merger with Germany’s Qiagen.

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