Utilities and energy boost as Iseq dips
European equities turned positive after a damp start yesterday as strong gains in utilities, car and energy stocks outweighed losses from jewellery maker Pandora after disappointing results. Investors pointed to strong earnings growth as the second-quarter results season powered on.
The pan-European STOXX 600 index was up 0.2pc, while blue chips rose 0.4pc. Britain's FTSE 100 was also up 0.2pc, and Germany's DAX gained 0.3pc.
The Iseq, however, fell 0.16pc or 10.45 points to end the trading session at 6,675.45.
Year-on-year earnings growth for the quarter is running at 17pc so far, with results in from 70pc of MSCI eurozone companies, data from Reuters shows.
"Investors should be confident that earnings growth is coming through," said Andrew King, head of European equities at BNP Paribas Investment Partners. "The aggregate level of earnings growth looks to be very, very high."
Some 51pc of companies have beaten expectations, with this figure rising to 55pc for the broader MSCI Europe universe. Most of the outperformance was down to energy stocks and financials,
"If you strip out the banks and energy it's a lot less - but if you disaggregate the two strongest sectors from any index you're going to get worse figures; so I don't think it's that legitimate to do this," said King.
While moves in the index were muted on the day, earnings caused some sizeable price action among single stocks.
Results hit shares in Pandora, which slumped 14pc after second quarter results lagged estimates.
Falls in Paddy Power Betfair and InterContinental Hotels Group weighed on the European travel and leisure sector.(Reuters)