Europe: Shares end higher on positive earnings, SimCorp surges
EUROPEAN shares ended higher on Thursday supported by positive earnings, especially reports from Deutsche Bank and Barclays that eased concerns about the banking sector’s health, while Denmark’s SimCorp surged on a deal with Deutsche Boerse.
The pan-European Stoxx 600 index was up 0.2 per cent, gaining for the first time in three sessions.
SimCorp jumped 38.3 per cent to the top of the index, after stock exchange operator Deutsche Boerse announced a 3.9 billion euro (S$5.76 billion) takeover offer of the software firm. Deutsche Boerse shares fell 7.7 per cent.
Apart from dealmaking, investors gauged a raft of earnings reports.
Barclays Plc rose 5.3 per cent on an estimate-beating quarterly profit, as a resilient performance from its consumer bank offset pressure on other key business lines.
Deutsche Bank AG gained 2.5 per cent following a better-than-expected rise in first-quarter profit, as income from higher interest rates offset a slump in revenues at the investment bank.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
The broader banking index added 1.1 per cent, while the industrial goods sector gained 1.3 per cent after Swedish engineering firm Atlas Copco jumped 14.4 per cent on posting record orders and a quarterly revenue beat.
Unilever climbed 1.4 per cent on better-than-expected quarterly underlying sales, as the Dove soap maker raised prices yet again to compensate for higher commodity and supply chain costs.
“European equities have seen earnings estimates reduced throughout the year, and this should set the bar to a beatable level,” said Patrick Armstrong, chief investment officer at Plurimi Wealth.
“We expect revenues will generally beat throughout this reporting season, and earnings estimates to be met. Margins may prove difficult to defend going forward, but it seems most companies have had a good record at passing rising prices on to consumers.”
The Stoxx 600 tracked gains of 1.4 per cent this month, as corporate reports so far proved less dire than expected following a chaotic month driven by banking sector stresses in March. But uncertainty over interest rate hikes remain.
Markets now await first-quarter euro zone GDP data due on Friday, expected to show how elevated energy prices and tighter banking standards have impacted the economy, ahead of the European Central Bank’s May 4 policy meeting.
Media shares dropped 1.7 per cent, leading sectoral declines, as Universal Music Group fell 6.6 per cent after worse-than-expected growth in subscription streaming overshadowed a revenue beat.
STMicroelectronics NV lost 8.3 per cent on worries that a slowdown in the semi-conductor industry would eventually catch up with the company. REUTERS
Share with us your feedback on BT's products and services
