Business Irish

Saturday 1 October 2016

Earnings reports help push European stocks upwards

Published 12/11/2015 | 02:30

Traders work on the floor of the New York Stock Exchange. Photo: Reuters
Traders work on the floor of the New York Stock Exchange. Photo: Reuters

European stocks had climbed by mid-afternoon yesterday, resuming a rally that had stalled earlier this week, amid deal activity and earnings reports.

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By mid afternoon in Dublin, the ISEQ Overall Index was up 0.55pc or 36.09 points to 6,569.88

The leaders on the Dublin market included bookmakers Paddy Power, which increased 3.1pc to €111, while drinks group C&C rose 0.8pc to €3.70.

On the other side of the board, the laggards included packaging giant Smurfit Kappa, down 0.5pc to €25.88 by mid afternoon, while recruitment firm CPL Resources had fallen 0.8pc to €6.40.

Elsewhere, SABMiller gained 2.3pc after Anheuser-Busch InBev made a formal offer to buy it for about $107bn. AB InBev added 1.6pc. Carlsberg climbed 6.9pc after reporting profit that beat estimates and announcing job cuts to reduce costs.

Henkel climbed 7.9pc after raising its annual earnings projection.

The Stoxx Europe 600 Index added 0.9pc by mid afternoon in London. The benchmark gauge has rebounded 12pc from a September low, helped by European Central Bank President Mario Draghi's comments last month that officials will consider additional stimulus in December.

"Expectations for ECB easing are still high in the market now, so a weaker euro is giving good support for European equities, while better-than-expected earnings improve sentiment," said Allan von Mehren, chief analyst at Danske Bank in Copenhagen.

"It's all part of the same equation that's contributing to quite a good outlook for Europe."

The Stoxx 600 is rising today, after a rally lost steam earlier this week amid worsening data from China and the prospect of higher US rates. The gauge is heading for its best annual performance since 2013.

Among other shares active on corporate news, TalkTalk Telecom Group jumped 12pc after its sales beat estimates and Banca Popolare di Milano Scarl advanced 6.7pc on better-than-forecast net income.

Vivendi slid 7.6pc after posting profit that missed analysts' estimates.

Mediaset slipped 8.8pc after reporting a wider-than-forecast net loss. Osram Licht tumbled 25pc after analysts said they were disappointed by the company's 2016 projections.

On currencies, the dollar had its worst day in November after climbing to the highest level in more than a decade as traders consider the timing and pace of interest-rate increases by the Federal Reserve.

The US currency struggled to extend gains that pushed it at least 1pc higher against all of its 10 developed-nation counterparts this month.

The probability that the Fed will raise rates by next month was 68pc, compared with 50pc at the end of October, after a US Labour Department report last week

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