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Europe: Shares hit 2-month closing high on strong earnings
[LONDON] European shares hit a two-month closing high on Thursday, with companies such as scents and flavours maker Symrise and consumer group Henkel hitting record highs after strong results and encouraging updates.
Henkel rose 5 per cent as its results beat expectations and it lifted its guidance for its core profit margin. It was the top riser in Germany's DAX, which gained 0.9 per cent.
Symrise shares rose 5.5 per cent after first-half sales surged 16 per cent to 1.46 billion euros and the company said it was aiming to outperform the global flavour and fragrance market again in 2016.
"We remain positive on the (specialty chemicals) sector," Northern Trust Capital Markets' head of global equities, Gary Paulin, said.
"The leaders in the sector still have a long tail of growth via consolidation ahead."
Belgian financial group KBC rose 5.2 per cent after reporting a year-on-year rise in net profit in the second quarter as loan and deposit volumes grew in most of its core markets and it kept costs low.
Also among the gainers, hearing aid and headset maker GN Store Nord surged 7.7 per cent after posting strong second-quarter growth.
The second-quarter earnings season is drawing to a close in Europe. More than 80 per cent of Stoxx 600 companies have already reported results, of which 60 per cent have beaten or met expectations, according to Thomson Reuters Datastream.
The pan-European Stoxx 600 index ended 0.8 per cent firmer, the highest close since late May. The broader FTSEurofirst 300 index finished 0.9 per cent stronger.
However, gains were capped by weakness in companies such as Old Mutual, down 3.8 per cent, after it posted a profit drop of 9 per cent, a worse-than-expected performance.
"Adjusted operating profit came in well behind our and consensus' estimates, driven by significantly weaker UK Wealth Management earnings than expected," UBS analysts said in a note.
Potash and salt miner K+S fell 5.6 per cent after saying it expected operating profit to more than halve in 2016.