Europe: Shares end fifth week higher on earnings boost

EUROPEAN shares ended higher on Friday (Apr 21) as strong quarterly earnings boosted shares of SAP and EssilorLuxottica, offsetting a slump in miners.

The pan-European Stoxx 600 index rose 0.4 per cent, clocking its fifth straight week of gains.

Business software maker SAP SE jumped 5.2 per cent to its highest level in more than a year after reporting first-quarter revenue above analysts’ expectations and saying it plans to use generative AI in its products.

European technology stocks rose 0.9 per cent, while healthcare shares rose 1.7 per cent, with both leading sectoral gains.

EssilorLuxottica SA jumped 6.3 per cent, among top boosts to the blue-chip Euro Stoxx index, after the luxury eyewear maker reported a rise in first-quarter revenue on a rebound in China-led growth.

“We’re seeing resilience with a lot of companies, but what we’re seeing is less really good news than not too much bad news,” said Danni Hewson, head of financial analysis at AJ Bell.

Miners were the biggest laggards, falling 3.8 per cent, tracking copper prices lower on a lacklustre demand outlook. The index hit a near one-month low.

News that Chile plans to nationalize its vast lithium industry, the world’s second largest producer of the metal essential in electric vehicle batteries, also hurt miners.

“The race to supply lithium is going to be an incredibly hard-fought one,” Hewson said.

SEE ALSO

‘Mild recession’ for UK still a possibility in 2023, but there are enough reasons to be optimistic

ECB says 16 eurozone banks fall short of climate demands, may face penalties

Shares in Rio Tinto fell 5.8 per cent after JPMorgan cut the stock’s target price.

European stocks have gained more than 2 per cent so far this month as fears of a banking crisis abated and investors looked ahead for the earnings season.

Economic recovery in the euro zone has unexpectedly gathered pace in April as the bloc’s dominant services industry saw already buoyant demand rise, more than offsetting a deepening downturn in manufacturing, surveys showed.

But central bankers, including European Central Bank vice president Luis de Guindos and Finnish central bank governor Olli Rehn, maintained their hawkish stance.

Mercedes-Benz Group AG climbed 1.4 per cent as it reported first-quarter results above market expectations.

Britain’s midcap index rose 0.7 per cent, with payment provider Network International’s shares surging 10.4 per cent to their highest since June 2021 after it received a bid from Brookfield Asset Management. REUTERS