European stocks rise as earnings boost sentiment

European stocks rise as earnings boost sentiment
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First Published: Thu, Apr 30 2009. 02 01 PM IST
Updated: Thu, Apr 30 2009. 02 01 PM IST
Frankfurt: European stocks gained on Thursday for the second consecutive day, led by mining stocks, as a wave of European blue-chip earnings gave investors reason for optimism ahead of important US data later in the day.
At 1:32pm, the FTSEurofirst 300 index of top European shares was up 1.5% at 828.95 points, after gaining 1.9% on Wednesday to hit a 11-week closing high.
“Overall, today’s numbers don’t look too bad so far and underscore the positive sentiment that is currently present in the market,” said Marcus Silbe, analyst at German brokerage Close Brothers Seydler.
“However, further input from the US earnings as well as macro data later in the day will determine if we stay up or if markets drop.”
German truck maker MAN soared 6.3% after the company posted operating profit of 100 million euros, above analysts’ expectations of 73 million.
Chemicals giant BASF also posted results clearly above expectations, lifting its shares 8.5%.
“The positive EBIT was a major surprise. Cost control is excellent. However the low sales volumes are hard to digest: the company indicated that the cost of capital goal is almost impossible to reach,” DZ Bank analyst Peter Spengler said.
Across Europe, the FTSE 100 index was up 1.5%, Germany’s DAX gained 2.1% and France’s CAC 40 was 1.5% higher.
Miners were the top sectoral gainer, with group Anglo American Plc up 4.2% after the company posted a 22% rise in first quarter iron ore output on while copper production declined by 5.4%.
French carmaker Renault advanced 8.2% after the company on late Wednesday posted a 31% drop in first-quarter sales to €7.08 billion, but reaffirmed its focus on generating positive free cash flow in 2009.
“The first quarter is now behind us. European markets are likely to improve owing to the trade-in schemes in a number of European countries,” one trader said.
On the downside, telecom bellwether Ericsson posted weaker-than-expected first-quarter underlying earnings, sending its shares down 8.3%.
Later in the session, investors will train their sights on European unemployment figures and US core personal consumption expenditure data as well as jobless figures.
“In the US, the drop in employment and hours worked likely pulled down personal income again in March,” UniCredit wrote in a note.
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First Published: Thu, Apr 30 2009. 02 01 PM IST
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