BERLIN, April 20 — A clutch of positive earnings including from chipmaker ASML and consumer stock Danone, helped European shares rebound on Wednesday, although worries over the Ukraine-Russia war, slowing growth and rising yields kept gains in check.
The pan-European STOXX 600 ticked up 0.8 per cent making back all of Tuesday's losses. Rising bond yields which had pressured stocks, fell on Wednesday but were still at elevated levels on hopes of central bank tightening.
Technology stocks were the biggest gainers as chipmaker ASML Holding climbed 5.3 per cent following a first-quarter sales beat.
Danone jumped 5.8 per cent after the French food group posted stronger quarterly sales growth and maintained its 2022 targets, while Heineken rose 5.2 per cent on a sharper rise in quarterly beer sales, allowing the firm to stick to its 2022 forecast.
Capping gains were miners, down 2.6 per cent as Rio Tinto fell 4.8 per cent after reporting lower iron ore shipments in the first quarter and warning of risks from inflation, China's pandemic-related lockdowns and the Ukraine war.
“Despite the risk rebound, headwinds are likely to prevail in the short term, as lingering risks of a war escalation and sanctions are augmented by tougher central banks and increased signs of slowdown,” said Michele Morganti, equity strategist at Generali Investments.
The STOXX 600 has declined over 5 per cent so far this year, with tech stocks losing 20 per cent, while commodity-linked stocks surged by the same measure on rising prices.
Profits for European companies are expected to have grown by 25% in the three months to end-March, a much lower pace compared to the 60-150% rates of 2021 with outlook for the rest of 2022 being the big question for investors as inflation surges to record highs. Read full story
Data yesterday showed German producer prices rose 30.9 per cent on the year in March, reflecting the effects of the Ukraine conflict.
GlaxoSmithKline fell 1.1 per cent fell as hundreds of workers voted to strike against the drugmaker's pay raise being well below the rate of inflation.
Credit Suisse slipped 1.7 per cent after the Swiss bank said it expects a first-quarter net loss and higher negative impacts from Russia's invasion of Ukraine. Read full story
Food delivery company Just Eat Takeaway.com firmed 1.9 per cent after saying it is in talks for a possible sale of its US arm Grubhub and reported quarterly results.
France's CAC 40 gained 1.4 per cent ahead of a key debate between presidential candidates Emmanuel Macron and Marine Le Pen before Sunday's runoff vote.
Macron is seen winning the election according to polls. The abstention rate for the vote is seen at around 26 per cent according to one poll. — Reuters
