Europe close: Stoxx hits fresh record as earnings impress

European stocks ended Wednesday's session with moderate gains, with the Stoxx 600 index hitting a fresh record, as a host of well-received corporate earnings, falling oil prices and an interest-rate cut in Sweden lifted investor sentiment.

"Traders continue to take advantage of the uptick in sentiment which greeted the new month, following a dismal April," said David Morrison, senior market analyst at Trade Nation, pointing out that the Euro Stoxx 50, DAX, FTSE 100 and CAC are all trading at or close to record highs.

The Stoxx 600 rose 0.34% to a new high of 515.77, with Europe-listed blue chips AB InBev, Puma, Siemens Energy impressing with results and airline stocks flying high.

Sweden’s central bank trimmed interest rates on Wednesday, for the first time since 2016. In an unanimous decision, Riksbank reduced the cost of borrowing by 0.25 percentage points to 3.75%, arguing that while inflation was approaching target, economic activity was weak.

Eyes will now turn towards the Bank of England meeting on Thursday. While no change in policy is expected, the outlook statement from the central bank will be keenly watched for inflation projections over the coming months.

"The market will be looking to see if the BOE is a little more confident about the outlook for inflation at this meeting now that: one, the oil price has moderated back to the low $80s [...]; two, there has, so far, been no external inflation shock that is putting upward pressure on energy prices," said Kathleen Brooks, research director at XTB.

"The fly in the ointment is still wage growth, which at 6% remains high, but it has still fallen sharply."

In macro news, industrial output in Germany fell in March, according to data released by Destatis, though it wasn't as big a drop as expected after figures for the previous month were revised lower. Industrial production fell by 0.4% over the month, following a revised 1.7% increase in February, which was changed from the initial estimate of +2.1%. Nevertheless, economists were expecting a drop of 0.6% in March.

Market movers

Shares in Anheuser-Busch InBev were rising strongly in Brussels after the Belgian beverages giant reiterated its full-year guidance following better-than-expected first-quarter volumes. The Stella Artois, Budweiser and Bud Light manufacturer said that volumes were down 0.6% year-on-year at 140.55m hectolitres (hls), better than the 1% decline expected.

Puma's share price jumped 10% after the sporting goods manufacturer delivered an in-line first-quarter performance, with surging direct-to-consumer sales making up for weakness in wholesale, as the company reiterated its growth guidance for the full year.

Siemens Energy surged 12% after the German group upped its full-year outlook on the back of strong quarterly numbers. The clean energy specialist also announced a change of leadership at its troubled wind turbine unit, Siemens Gamesa, which has been rocked by technical problems with core products as well as surging inflation.

Airline stocks were flying high after the recent drop in oil prices, with Brent down hitting a low of $81.71 a barrel during the session before erasing losses. IAG, easyJet, Air France-KLM and Deutsche Lufthansa were all higher.

Heading the other way was Alstom, dropping 5% after announcing plans to raise €1bn from shareholders, as it looks to slash debt.

Also lower was BMW Group after higher manufacturing costs weighed on quarterly earnings. The Munich-based premium car maker - which owns the Mini, Rolls-Royce and BMW marques - said EBIT fell by nearly a quarter to €4.05bn despite revenues staying largely flat.