European stocks up as Alcatel results beat forecasts

European stocks up as Alcatel results beat forecasts
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First Published: Wed, Feb 04 2009. 03 41 PM IST
Updated: Wed, Feb 04 2009. 03 41 PM IST
Paris: Extending the previous session’s gain the European shares surged in early trade on Wednesday, as Alcatel-Lucent reported a forecast-beating quarterly sales while overshadowing the disappointing earnings from the Swiss pharma major Roche.
Miners were on the rise after BHP Billiton, the world’s biggest miner, reported 2.2% increase in first-half profits, boosted by a last burst of Chinese demand growth. BHP was up 3.3%, while Rio Tinto gained 2.1% and Anglo American added 2%.
The FTSEurofirst 300 index of top European stocks was higher by 0.7% at 797.69 points, at 0937 GMT. The benchmark index - which is still down 4.5% in 2009 - gained 1.9% on Tuesday, boosted by Vodafone’s reassuring update.
“We’re getting a breather after a series of negative sessions. Overall, corporate results are not as bad as people had feared. But that doesn’t mean the bear market is over,” said Jacques Henry, analyst at Louis Capital Markets, in Paris.
Alcatel-Lucent rose 7% after it posted forecast-beating quarterly sales and adjusted earnings before interest and taxes, while booking a fresh impairment charge of €3.91 billion ($5.10 billion), reflecting a “drastic deterioration” of the global outlook.
Alcatel-Lucent’s shares, recently plagued by a series of profit warnings, had tumbled 70% last year, falling behind the DJ Stoxx technology index, which lost 50%.
Banks were on the gaining side, with Deutsche Bank rising 5.3% on speculation that Germany’s biggest lender will be upbeat about 2009 prospects when it reports fourth-quarter and full-year results on Thursday, traders say.
“There are hopes that they have written off everything ‘bad´ in the fourth quarter and have therefore been able to get off to a good start in 2009,” one trader said.
Public works group Vinci gained 2% after posting fourth-quarter sales figures.
On the downside, Swiss pharma firm Roche dropped 7.8% after it reported a 5% fall in 2008 profit, missing expectations, and said it sees growth slowing this year.
The disappointing results dragged other pharma stocks, with Sanofi-Aventis down by 1.1% and AstraZeneca, which also traded ex-dividend, down 3.9%.
Munich Re, the world’s biggest reinsurance company, dropped 4.3% after posting a down profit for the last three months of 2008, blaming the intensifying financial crisis.
Across Europe, UK’s FTSE 100 index was up 0.7%, Germany’s DAX index 0.8% higher, and France’s CAC 40 up by 1.2%.
The market was also buoyed by data showing a rise in China’s official manufacturing index, coupled with a surge in bank lending, feeding optimism that the world’s third-largest economy may soon be on its way to a recovery.
Later in the session, investors’ focus will turn to the US ADP national employment data, a preview for Friday’s eagerly-awaited US monthly jobs data.
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First Published: Wed, Feb 04 2009. 03 41 PM IST
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