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Europe: Shares post fifth week of gains as earnings gather pace
[LONDON] Well-received results from Spanish banks and a recovery among tech stocks lifted European shares to a fifth straight week of gains on Friday, its longest winning streak since September.
The pan-European Stoxx 600 index closed up 0.2 per cent, a gain of 0.7 per cent for a week when bank results were in focus.
Spain's BBVA rose 2.4 per cent and Caixabank gained 1.7 per cent. Both banks beat profit forecasts thanks to strength in their overseas markets.
Britain's RBS was a laggard, reversing early gains to close 1.5 per cent lower. Concern over a pending fine from the US Department of Justice eclipsed its first-quarter update.
RBS was among the biggest fallers on the European banking index, which declined 0.2 per cent.
Finnish biofuel producer and oil refiner Neste led gains, rising 10.2 per cent after increasing guidance on margins and operating results following a strong first-quarter.
Satellite firm SES came second, up more than 9.9 per cent after strong growth in its networks division helped it beat first-quarter expectations/ Tech stocks rose 0.8 per cent following well-received results from Facebook, Amazon, Microsoft and US chipmakers.
Electrolux fell the most on the Stoxx, down 11.2 per cent, after a surprise drop in core operating profit and a warning on raw material costs.
French pharmaceutical group Sanofi lost 1.7 per cent after reporting sluggish first-quarter profit growth. It blamed a stronger euro and lower sales at its diabetes unit .
The earnings season has taken the focus off broader issues, such as global trade and geopolitics, which rattled markets in March. Worries about rising bond yields have also been away for now.
"We've been able to focus much more the earnings season and underlying trends," Mike van Dulken, head of research at Accendo Markets, said, adding that companies can be more cautious in the first quarter.
So far, around a quarter of companies in the MSCI EMU index have given first quarter updates.
Nearly 60 per cent have either beat or met analyst expectations, according to Thomson Reuters I/B/E/S data. Earnings growth is clocking in at over 15 per cent for the quarter, in dollar terms.