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Europe: Energy firms boost shares as earnings roll in
[LONDON] Supportive crude prices and strong results from energy firms Subsea 7 and Tullow Oil helped European shares inch higher on Wednesday, while banks weighed on index-level gains as investors awaited a Fed policy decision and UK GDP figures.
The pan-European STOXX 600 gained 0.3 per cent, in line with euro zone stocks and blue-chips, as oil and gas stocks gained 0.8 per cent.
Subsea 7 rose to the top of the STOXX, up 5.2 per cent after the oil services firm reported second-quarter earnings above forecasts and lifted its revenue guidance for the year.
Tullow Oil gained 3.1 per cent after higher output from new fields helped the Africa-focused oil producer to a 46 per cent rise in sales revenue to US$788 million over the first half, though it also reported impairment charges due to stubbornly low oil prices.
Five years after ECB chief Mario Draghi's "whatever it takes to preserve the euro" speech which set the foundations for strong gains in the currency, the euro was again front and centre of investors' minds as recent strength weighed on earnings growth expectations for Euro zone corporates, particularly those most dependent on exports, such as industrials firms.
With a quarter of euro zone MSCI Europe companies having reported so far 40 per cent beat earnings estimates while 48 per cent missed, according to Thomson Reuters data.
The industrials sector was seeing the worst performance with 86 per cent of firms missing expectations.
Among top fallers on the day, shares in chipmaker ASM International fell 6.1 per cent in early deals after it reported record order intake for the second quarter.
Expectations are high for tech firms such as ASM, whose shares have gained 30 per cent this year as demand for chips grows robustly.
UniCredit led losses on the banking index which was the worst-performing on the day. The Italian bank's shares were down 0.7 per cent after it said it had suffered a cyber attack giving unauthorised access to Italian clients' data.