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Europe: Earnings buoy shares but DAX hurt by Siemens
[MILAN] European shares inched up on Thursday as solid company earnings more than offset a weak energy sector and a slump in German industrial giant Siemens on delays to a planned unit listing.
The pan-European STOXX 600 index rose 0.08 per cent to 378.93 points and euro zone blue chips added 0.20 per cent, reaching 3,466.37 points.
Siemens was the top weight to the STOXX after saying it would wait until next year to list its healthcare unit following the release of disappointing quarterly earnings.
Its 3.1-per cent slide dragged on the German blue chip DAX index, which fell 0.2 per cent, underperforming the rest of Europe and adding to a recent slide due to strength in the euro.
However strategists at Credit Suisse's wealth management arm upgraded German stocks to 'outperform' saying the rise in the single currency had opened an unmerited valuation gap.
"Earnings momentum and revisions have not been very strong in Germany but they are no worse than the middle of the pack, so the discount you are seeing relative to the rest of the euro zone is not fully merited," said Pierre Bose, head of European strategy at Credit Suisse Wealth Management.
Elsewhere in Europe some solid earning updates supported the broader market.
UniCredit rose up 7.2 per cent as Italy's largest bank reported its biggest quarterly profit in almost a decade, outstripping market expectations and restoring cash dividends after a radical balance sheet overhaul. "Things are going much, much better than expected," one trader said.
French stationery supplier Bic jumped more than 5 per cent after reporting sales up 3 per cent in the first half, while Next jumped 9.7 per cent after the British retailer returned to sales growth in the second quarter, boosted by improved product ranges and a better online offer.
Around 64 per cent of MSCI Europe companies have already reported results. Of them nearly two thirds have either beaten or met analyst expectations, pointing to a second-quarter earnings growth of more than 22 per cent, according to Thomson Reuters IBES data.
Among the losers were Norwegian oil services firm TGS , down 5.4 per cent after slightly lighter revenues for the second quarter, and Tenaris, down 7.2 per cent, as its outlook disappointed following in-line quarterly results.
The oil and gas sector, down 0.4 per cent on the day, is the worst performer in Europe so far this year and the only one trading in the red.