Europe: Shares flat at start of busy earnings week, Philips jumps

EUROPEAN shares ended flat on Monday (Apr 24) at the beginning of a week packed with high-profile earnings, while shares of Dutch health technology company Philips jumped after strong first-quarter results.

The pan-European Stoxx 600 index closed at 468.97 points, keeping to a narrow three-point range for most of the day.

“Monday’s session seems to provide the template for most of the week — tentative gains that then slip away,” said Chris Beauchamp, chief market analyst at online trading platform IG.

Philips jumped 13.8 per cent after the company posted better-than-expected first-quarter results and said it had set aside 575 million euros (S$847 million) related to lawsuits over its recall of respiratory devices.

Healthcare shares rose 0.1 per cent, while technology shares fell 1.0 per cent, giving back most of its gains from Friday.

Big banks Barclays, Santander, Deutsche Bank, UBS Group and consumer companies like Nestle, Reckitt and Unilever report results this week.

Credit Suisse, in what is likely to be its last time reporting results, said 61 billion Swiss francs (S$91.6 billion) in assets left the bank in the first quarter and that outflows were continuing, as its state-engineered marriage with UBS is expected to be completed soon.

After a chaotic month in March, European shares have risen 2.4 per cent so far in April, tracking their best monthly performance since January as cheap valuations and China’s reopening bets is boosted firms.

Luxury group LVMH surpassed a market capitalisation of US$500 billion, making it the largest valuation on record for a European company and the first above the US$500-billion mark.

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“It (LVMH) might not escape unscathed if a recession does materialise, but as the 2020 and 2022 rebounds in its shares demonstrate, there is plenty of appetite for a stake in the ever-growing global luxury market,” Beauchamp added.

Investors will also monitor results of some of the biggest US companies including Microsoft, Google parent Alphabet and Amazon.com this week.

German business morale rose in April, adding to positive signs as Europe’s largest economy hopes to have dodged a winter recession, according to a survey.

Shares of Software skyrocketed 49.0 per cent after private equity firm Silver Lake offered to buy the German software developer.

UK’s Medica Group also surged 33.8 per cent after the telemedicine services company recommended a takeover offer from private equity firm IK Investment.

Sweden’s Avanza dropped 9.4 per cent as the financial services provider missed first-quarter profit expectations. REUTERS