Europe: Ericsson, Volvo propel stocks as Spain lags

[LONDON] European shares rose in early deals on Friday, recovering some losses as well-received earnings reports boosted shares in Volvo and Ericsson, though political malaise held back Spanish stocks.

The pan-European STOXX 600 was up 0.2 per cent, rebounding from its lowest closing level so far in October, while euro zone blue chips gained 0.3 per cent.

Spain's benchmark IBEX was in negative territory, however, down 0.1 per cent ahead of a special cabinet meeting on Saturday which could see Spain suspending Catalonia's autonomy.

While the IBEX is still up around 9 per cent so far this year, it has lagged the STOXX 600 in October, down around 1.7 per cent since Catalonia's independence referendum on Oct 1.

Elsewhere, company results were in focus, with Swedish truck maker Volvo the biggest STOXX riser, up more than 6 per cent and hitting a record high after beating expectations.

Volvo was joined by Ericsson, whose shares jumped 3.6 per cent after its update.

European third quarter earnings are expected to grow 4.5 per cent from the same period in 2016, an increase of 1.3 per cent excluding the energy sector, according to estimates from Thomson Reuters I/B/E/S.

More broadly, European financials provided the biggest support to the STOXX, with banks rallying 0.6 per cent after the US Senate passed a budget blueprint which will pave the way for tax cuts.

Basic resources was the top-gaining sector, rising 1 per cent as a firmer copper price lifted shares in miners.

REUTERS