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European stocks cap longest rally in 6 weeks on earnings reports
[LONDON] European stocks eked out a fifth day of gains, matching their longest winning streak since March, as Nestle SA led food and beverage shares higher.
Nestle rose 2 per cent after the world's biggest food company reported first-quarter sales that beat analysts' estimates. Hays Plc climbed 7.3 per cent after the UK recruitment agency said quarterly net fees grew by 10 per cent or more in 17 countries.
The Stoxx Europe 600 Index added less than 0.1 per cent to 343.84 at 4:31 p.m. in London, less than a point away from a two-month high reached on March 14. The benchmark earlier erased a decline of 0.4 per cent to rise as much as 0.4 per cent. It jumped the most in a month yesterday amid a surge in banks and optimism that China's economy is stabilizing.
"The focus is the earnings season," said Ralf Zimmermann, a strategist at Bankhaus Lampe in Dusseldorf, Germany. "After the recent rebound in markets there are certainly some notable clouds in the sky and I would expect markets to zigzag. We've seen stabilization in macro data in China, but stabilization is one point, re-acceleration is another."
Despite recent advances, stocks have struggled to gain fresh impetus after rebounding as much as 14 per cent from a Feb 11 low. The Stoxx 600 has traded in a tight range in the past month amid renewed concern over the prospects for global growth.
Investors are assessing earnings reports for clues on corporate health, after Alcoa Inc kicked off the US reporting season this week. Analysts now forecast profit at Stoxx 600 companies will shrink in 2016, reversing earlier calls for growth.
Among other shares active on corporate news, Burberry slid 3.7 per cent after forecasting a revenue drop at its wholesale unit in the first half of the year. ASM International NV lost 4.7 per cent after peer Taiwan Semiconductor Manufacturing Co forecast quarterly sales below analyst estimates.
Banks, the worst performers this year, reversed earlier declines to complete a fifth day of gains, following Wednesday's biggest surge since 2011.