Paris: European stocks were up 1.2% by midday on Monday, hitting a near three-week high, as forecast-beating results from Philips fuelled hopes over results ahead of this week’s earnings from bellwethers.
At 3:40pm, the FTSEurofirst 300 index of top European shares was up 1.2% at 1,010.24 points, after rising to as high as 1,010.55 points, the index’s highest level since 23 September.
Shares of Philips surged 6.1% after posting better-than-expected third-quarter results, as the world’s biggest lighting maker and Europe’s biggest consumer electronics producer benefited from cost-cutting measures.
Shares of tech companies and conglomerates gained ground, with both Siemens and Nokia up 2.7%, while Alcatel-Lucent soared 5.2%, also helped by a rating upgrade from Societe Generale, which upgraded its recommendation on the stock to “hold” from “sell”.
“We’re testing the resistance on the upside at the moment, but to resume the upside trend, we need good quarterly results,” said David Thebault, head of quantitative sales trading, at Global Equities, in Paris.
“The figures from Philips bode well for the earnings season, because the company’s businesses range from healthcare to technology, touching a lot of sectors. It’s a good indication of what to expect. Overall, I think this earnings season will be strong.”
Investors eagerly awaited quarterly results from US bellwethers Intel Corp, Johnson & Johnson, Citigroup, Bank of America, Goldman Sachs, JPMorgan, Google, IBM and General Electric, expected to report this week.
Banks and insurance stocks rose on Monday, with HSBC up 0.8%, UBS up 1.3% and Allianz up 2%.
The banking sector, which had a dismal 2008, has jumped 171% since the market reached a floor in early March, outpacing the FTSEurofirst 300, which is up 56% over the same period.
Barclays bucked the trend on Monday, down 1.2%. The Financial Times reported the UK lender is planning to spin off a 4-billion-pound ($6.35 billion) portfolio of complex credit assets in a bid to further clean up its balance sheet.
Shares of oil companies gained ground as crude oil futures hit the $73 mark, up nearly 2%, on optimism over the pace of global economic recovery and indications of stronger oil demand.
Total added 1.5%, Repsol rose 1% and BP gained 1.4%.
Around Europe, UK’s FTSE 100 index was up 1.1%, Germany’s DAX index up 1.5%, and France’s CAC 40 up 1.3%.
So far this year, the FTSEurofirst 300 is up 21%, the FTSE 100 up 18%, the DAX up 21% and the CAC up 20%.