Europe: Shares mixed after Wall Street strength counteracts BOJ

[LONDON] European shares were mixed on Thursday, with initial weakness after the Bank of Japan unexpectedly held off from expanding monetary stimulus later counteracted by strength on Wall Street.

The pan-European FTSEurofirst 300 index, which hit a three-month high last week, closed up 0.2 per cent at 1373.23, rising off its lows after the Wall Street open.

A rise in Facebook to a record high after its results supported sentiment, while commodity stocks were buoyed as Brent crude rose to its highest level in 2016. "European markets recovered from sharp early losses as strength in the basic resource sector following a fresh 2016 peak in oil prices unwound some of the dismay at no addition to stimulus from the Bank of Japan," Jasper Lawler, market analyst at CMC Markets, said in a note.

European stocks had tracked a pullback on the Nikkei and other major stock markets after the BOJ's move offset earlier momentum triggered by the US Federal Reserve staying tight-lipped on whether it would raise interest rates in June.

And the euro zone blue chip Euro STOXX 50 was still down 0.2 per cent, while Spanish and French stocks also closed in negative territory.

Weighing on Spain's IBEX, BBVA was also the worst-performing stock on the pan-European FTSEurofirst 300, dropping 7.2 per cent after it missed estimates with a 54-per cent fall in first quarter net profit.

France's Airbus fell 5.6 per cent after it reported a heavier-than-expected seasonal outflow of cash and warned of serious challenges for its A400M military plane, even as profits came in slightly ahead of expectations.

"Cashflow was weak in the quarter, reflecting the 2016 delivery profile ... The scale of the free cash outflow in Q1 could cause some concern, but we'd say that this fits with the usual seasonal pattern," analysts at RBC said in a note, rating the stock at "sector perform".

In the UK, Royal Bank of Scotland dropped 2.9 per cent in afternoon trade after it said it was likely to miss an end-2017 deadline to sell its William & Glyn brand. RBS said the financial impact on itself would be significantly greater than previous estimates.

Sector peer Lloyds fell 1.6 per cent after it reported underlying profits in line with expectations, keeping first quarter revenues steady and cutting bad debts despite the challenging economic environment.

Among the top performers in the banking sector, Deutsche Bank rose 4 per cent after it posted a surprise net profit in the first quarter, helped by lower litigation costs.

European mining stocks rose 3.3 per cent, led up by a 8 per cent surge in Anglo American after it sold more of its businesses in a bid to cut debt.

REUTERS