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Europe: Stock markets advance as shares in banks and retailers rise
[LONDON] European stocks rose on Wednesday as gains in the shares of major banks and retail companies offset weaker earnings elsewhere in the market.
The pan-European Stoxx 600 index rose 0.3 per cent, although the index remains down by about 6 per cent since the start of 2016.
The European bank index got a lift to stand 0.9 per cent higher after Wall Street bank Morgan Stanley reported better-than-forecast profits on Wednesday.
"Morgan Stanley's results have generally been a positive for the banking sector across the board," said Hantec Markets' analyst Richard Perry.
Nevertheless, the European bank index is still down by about 20 per cent since the start of the year due to concerns over bad debts at Italian banks, while Deutsche Bank also hit record lows last month.
The Stoxx Europe 600 Retail index also outperformed to rise by 1.5 per cent.
French supermarket retailer Carrefour rose after reporting higher sales while shares in online fashion retailer Zalando also advanced after it posted an improvement in its quarterly profitability.
French vouchers company Edenred also surged after investors welcomed its new strategy plan.
However, shares in building materials supplier Travis Perkins and consumer goods group Reckitt Benckiser both fell, with Travis Perkins issuing a profit warning while Reckitt Benckiser reported weaker-than-forecast sales.
Patrick Moonen, senior multi-asset strategist at NN Investment Partners, said investors were turning increasingly cautious, given uncertainty over Britain's exit from the European Union and lingering concerns about the euro zone economy.
"Markets are currently facing several headwinds, with a number of different geopolitical tensions affecting investors'confidence for the future," Mr Moonen said.