Europe close: Corporate results boost main indices

European shares continued to rally on Wednesday as upbeat earnings reports and a strong rise in travel stocks boosted sentiment.

The pan-European Stoxx 600 index extended gains, trading up by 1.65%, alongside a 1.85% rebound for the Cac-40.

Spain's Ibex 35 meanwhile was up 2.5%, followed close behind by a 2.36% gain for Milan's FTSE Mibtel.

"Tuesday’s rally has extended into a second day, and Monday’s sudden drop looks more and more like a sudden air pocket that produced excitement but little lasting impact," said IG chief market analyst Chris Beauchamp.

"At present it appears growth is being left behind, or at least technology stocks are, in part due to caution after Netflix’s results last night."

In corporate news, shares in Swedish bike and roof rack maker Thule soared 12% to top the Stoxx 600 as the company reported sales growth for the second quarter of 58% compared with the year-earlier period, making four quarters of growth in a row.

UK fashion retailer Next soared over 7% lifting annual profits guidance to the upper end of forecasts.

Travel stocks were also in favour, with cruise line operator Carnival up 9.4% after announcing more sailings in the summer/autumn season on Tuesday. British Airways owner IAG, and budget carrier easyJet were also higher.

Future rallied 9.16% after the magazine publisher and GoCompare owner said full-year profitability was set to be "materially ahead" of current market expectations amid a continued strong performance.

Dutch semiconductor equipment maker ASML gained as it raised its 2021 sales outlook and announced a new share buyback plan.

Swiss drugmaker Novartis slipped 1% as its second-quarter core net income beat market expectations, boosted by its key drug brands.

Among decliners, German business software group SAP slid 3.6% despite raising its outlook for the second time this year.

Mercedes-Benz maker Daimler edged up by 1% after it warned that a global shortage of semiconductor chips will dent car sales in the second half of 2021.

Royal Mail slumped after it said revenues rose 12.5% in the first quarter as people continued to shop online with Covid lockdown restrictions still in place, but that UK parcel volumes had started to slip as curbs were lifted.

Dutch food and biochemicals company Corbion fell to the bottom of the Stoxx, down 8% after Barclays cut the stock to “underweight”.