Europe close: Stocks hold onto gains amid positive corporate updates

European markets held onto their gains at the end of the week as investors digested softer-than-expected US retail sales and a bevy of positive corporate updates.

IG chief market analyst Chris Beauchamp said the latest US earnings showed that "the banking crisis of March is now a memory."

But he added: "While it is a Friday, and risk appetite is hard to sustain, today’s losses [on Wall Street] after Thursday’s gains show how delicate the rally in US equities is.”

The pan-European Stoxx 600 index was up 0.58% at 466.91, with all major bourses higher.

Germany's Dax put on 0.50% to 15,807.50 while the FTSE Mib added 0.89% to 27,872.24.

Euro/dollar slipped 0.54% to 1.0987.

Worth noting perhaps, reports over the previous few weeks had pointed to obstacles in the euro's path in the form of heavy options positions around 1.10 and 1.11.

At the sector level, Banks did especially well withing the Stoxx 600, climbing 2.98%.

Boosting lenders' shares, readings for inflation expectations one-year ahead and for retail sales saw Fed funds futures move to discount 80% odds of a further 25bp rate hike by the Fed at its 2-3 May meeting, effectively pricing in a hike - at least for now.

On the other side of the Atlantic meanwhile, investors cheered the latest earnings reports out of J.P. Morgan and Citigroup.

In the background, according to the US Department of Commerce, total retail sales volumes dropped by 1.0% month-on-month in March or twice the expected rate.

More important perhaps, the retail sales control group, which feeds into GDP estimates, only fell by 0.3% versus the 0.5% drop forecasts by economists.

Nonetheless, a 1.9% jump on the month in the volatile non-store retailing category waas a key reason behind the beat.

In equity news, shares in Dechra Pharmaceuticals soared 33% after revealing late on Thursday that the veterinary drug maker had entered talks with Swedish private equity group EQT to discuss a possible all-cash, £4.63bn deal.

Shares in Hermes gained as the Birkin bag maker reported a 23% rise in first quarter sales.

888 surged after the William Hill owner said it expects "significantly" higher adjusted core profit for this year, but that revenue could be lower by a low-to-mid single digit percentage.

Iconic boot maker Dr Martens also soared, up 11%, despite lowering profit guidance for the second time in four months due to higher costs at its Los Angeles distribution centre and lower wholesale revenues.

AAK jumped 9% as the Swedish vegetable oil producer reported record-high operating profit for the first quarter of 2023.

On the geopolitical front, Bloomberg reported that some of Ukraine's allies were increasingly skeptical that the country's military would be able to achieve a breakthrough on the battlefield in 2023.