[LONDON] European shares ended little changed on Wednesday as a rebound by the region's struggling banks and a rally in carmaker Fiat Chrysler helped offset losses among companies that reported poor earnings updates.
The pan-European Stoxx 600 index, which had fallen in the last two sessions, ended flat. The index, which slumped in the immediate aftermath of Britain's vote in June to quit the European Union, is down 8 per cent so far in 2016.
Fiat Chrysler, the worst auto stock so far this year, rose 8.2 per cent, making it the biggest Stoxx gainer after a report said it could sell its parts making unit Magneti Marelli to Samsung for over US$3 billion.
"FCA is currently trading at very depressed levels," Goldman Sachs, which has a buy rating on the stock, said in a note.
The Stoxx Europe 600 banks index rose 1.8 per cent, leading sectoral gainers, but it has fallen around 30 per cent so far in 2016, hit by concerns over bad debts and weak balance sheets.
HSBC rose 4.5 per cent as its plans to buy back up to US$2.5 billion worth of its shares eased investors' concerns as the bank reported a drop in profits.
ING jumped 8.2 per cent after its second-quarter profits beat forecasts while Societe Generale shares also climbed 3.2 per cent after the French bank reported higher net profits.
But UniCredit underperformed banks to fall 2.3 per cent after posting a surprise fall in its core capital in the second quarter. In spite of the disappointment the stock managed to remain above its all-time low touched last month.
Francois Savary, chief investment officer at Geneva-based fund management and consultancy firm Prime Partners, said that even though some banking stocks were rebounding, the overall earnings trend in Europe remained negative.
"European results look quite poor compared to the US, which is why a lot of investors are still taking their cash out of Europe," said Mr Savary.
Among the top fallers were Swiss money manager GAM, which fell 13.3 per cent after posting lower profits, and temporary power provider Aggreko, which fell 12.9 per cent after first-half profits missed some forecasts.
According to data from Thomson Reuters StarMine, second quarter earnings on the Stoxx 600 index are down 18 per cent from a year ago - whereas on the US S&P 500 index earnings have fallen by a more modest 1.8 per cent.