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Europe: Stocks close mixed; Apple supplier AMS soars

[LONDON] Shares of Apple suppliers were boosted by robust results from chipmaker AMS on Tuesday, but European shares were mixed as investors awaited the European Central Bank meeting later this week.

The pan-European STOXX 600 ended the day down 0.4 per cent, although the German, French, Italian and Spanish indexes all rose.

Earnings aside, trading remained timid as investors awaited the next market catalyst: the ECB meeting on Thursday.

"The market is anticipating that the ECB highlights some kind of inclination towards lower for longer, and that's supportive for equities," said Credit Suisse's Bose. "If they were a bit more hawkish that could take a bit of the steam out of the rally we've seen."

AMS jumped 22 per cent after reporting third-quarter sales just under expectations. Analysts said strong fourth-quarter guidance from the iPhone supplier offset the miss.

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"With AMS shares down 15 per cent in the last month given concerns around the impact from iPhone X delays/constraints, we see solid Q4 guidance as a relief till we get more clarity on iPhone sell-in trends when Apple reports on Nov 2," Credit Suisse analysts said in a note.

Other companies exposed to the iPhone X introduction also gained, with Dialog Semiconductor up 2.8 per cent and STMicroelectronics up 1.3 per cent.

Analysts said overall European company earnings could outperform against forecasts which were revised down ahead of the third-quarter results season.

"Expectations are lower and it will potentially be easier for there to be surprises," said Pierre Bose, head of European equity strategy at Credit Suisse.

Banco Sabadell, Caixabank and Santander led Spain's IBEX higher after Caixa reported the flow of deposits out of the bank had slowed since it moved its headquarters out of Catalonia.

Euro zone banks rose 1.3 per cent, their strongest daily gain in more than a fortnight as Commerzbank also made strong gains.

The German lender's shares jumped 6 per cent after sources said it hired Goldman Sachs and Rothschild to help defend against potential takeover bids.

Analysts at KBW were sceptical, however.

"We continue not to assume any M&A premium for CBK due to regulatory uncertainty and the unattractiveness of the German banking market," they said in a note, pointing to low return on total equity among German banks.

"We doubt that Commerzbank can receive a bid in the next 12-18 months," they added.

Finecobank's 6 per cent jump after third-quarter results boosted Italy's financials-heavy index by 1.1 per cent, outperforming its European peers.

In other gainers, oil services group Saipem rose 10.2 per cent, set for its best day in 13 months, after reporting a good third-quarter order intake and strong offshore business.

German plastics maker Covestro jumped 8.6 per cent to a record high after reporting a 50 per cent increase in third-quarter earnings and a share buyback of up to 1.5 billion euros.

Among top fallers, Swedish mining company Boliden disappointed investors with third-quarter earnings hit by production disturbances. Its shares dropped 6.6 per cent.

Randstad, the world's second-largest staffing company, slipped 5.2 per cent after reporting large one-off costs at Monster Worldwide, the US job hunting portal it acquired last year.


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