Europe close: Most stocks gain after well-received earnings
Most European stocks gained as investors weighed German and US data along with a slate of upbeat earnings reports.
Germany’s harmonised consumer price index rose an annualised 0.1% in July, in line with the previous month and with analysts’ expectations.
Jennifer McKeown, senior European economist at Capital Economics, said “we expect German inflation to remain very subdued and far below the ECB’s target for the region as a whole of close to 2%”.
The German unemployment rate held steady at 6.4% in July. However, the number of unemployed people rose by 9,000, compared with expectations for a 5,000 decline.
Elsewhere in Europe, the Greek stock market had been due to reopen this week but the Athens Stock Exchange said on Thursday that it’s unlikely to reopen as banks need to resolve some technical issues first.
In the US, gross domestic product rose an annualised 2.3% in the second quarter, coming in worse than the 2.5% growth expected but up from the previous quarter’s upwardly revised 0.6% gain.
The report follows the Federal Reserve’s announcement to keep interest rates at near zero. The Fed, however, dropped several hints after a two-day policy meeting that it is close to seeing enough improvement in the job market to raise the rate as early as September.
“Combined with today’s evidence that growth is steady but probably still below its full potential, this leads us to expect a December lift-off for interest rates,” said Cebr economist Alasdair Cavalla.
In the earnings session, defence and aerospace group Rolls-Royce rallied after the company reiterated its current full-year 2015 guidance and posted first-half numbers that were broadly in line with consensus.
AstraZeneca gained after its second-quarter earnings beat expectations as generic competition and the effects of a stronger US dollar were offset by the spinning off of assets and a good performance from the company’s Brillinta drug.
Asset manager Schroders was also on the front foot as it posted better-than-expected first half profit, on the back of strong demand for its fixed income products.
Shares in Finland’s Nokia rocketed after its second-quarter profit came in ahead of analysts’ expectations, despite challenging market conditions.
Deutsche Bank pushed up as its second-quarter profit more than tripled on the back of strong trading revenue.
Engineering company Siemens rallied after its third-quarter profit came in ahead of expectations, while shares in Alcatel-Lucent rose sharply as it posted a surprise rise in second-quarter profit.
On the downside, BT Group was under pressure. Although the company’s first-quarter numbers were broadly in line, almost every division disappointed analysts’ expectations with only BT Wholesale ahead of consensus.
British Gas owner Centrica was also under the cosh after announcing that it will axe up to 4,000 jobs, as it posted a near doubling of its first-half profits.
Repsol shares dropped after the Spanish oil company posted a 20% fall in second-quarter net profit, hit partly by lower oil prices.