Europe: Shares rise helped by good earnings; Deutsche Bank slips

[LONDON] European shares rose on Wednesday with the market underpinned by well-received earning updates from companies including Peugeot and LVMH, while Deutsche Bank fell after a poor update.

The pan-European STOXX 600 index ended up 0.4 per cent, while the FTSEurofirst 300 also rose by the same amount.

Auto stocks rose 2.2 per cent, making them the top sectoral gainers with Peugeot soaring 9.5 per cent after the French car maker said its first-half earnings doubled amid progress in its turnaround plan.

German carmakers including Volkswagen rose, helping the auto-heavy German index DAX recover all the losses it made since UK's shock vote to leave the EU last month.

Even though it nudged up its full-year earnings guidance, Fiat Chrysler fell 1.9 per cent as concerns remained about its exposure to a peaking U.S. market.

LVMH rose 7.5 per cent after fashion and leather sales growth beat forecasts, helped by solid demand in the United States and improved trading in Asia, excluding Japan.

"Our buy case on LVMH hinges on the underappreciated resilience of the Louis Vuitton brand combined with the defensiveness and momentum of the wider portfolio. H1 results reinforced our confidence in this view," UBS said in a note.

Among top gainers were French IT services group Atos , which rose 8.5 per cent after hiking its outlook, and British broadcaster ITV, which jumped 6.8 per cent on the back of its advertising revenue forecast.

In the beaten-down Travel & Leisure sector, airlines got a boost from Air France, whose shares jumped 4.5 per cent after lower costs led to an improvement in its earnings.

Among the top fallers, however, was Deutsche Bank which slumped more than 3 per cent after revenues fell sharply in the second quarter, while its core capital showed only a modest improvement.

Results at the German lender came two days before the results of EU-wide stress test are released. with Barclays saying Deutsche was among the top three vulnerable banks along with Italy's Monte dei Paschi and UniCredit, which are both taking steps to raise fresh capital.

French payments provider Ingenico Group dropped more than 9 per cent, making it the biggest STOXX faller following the release of its results.

Analyst at Berenberg said the performance of its North American business meant that achieving its double-digit sales growth target for the region in the full year was out of reach.

REUTERS