Europe open: Stocks edge higher despite BoJ disappointment, amid earnings deluge

European stocks edged higher in early trade despite what was considered by many as a disappointing announcement from the Bank of Japan, as investors sifted through a deluge of earnings.

At 0830 BST, the benchmark Stoxx Europe 600 index was up 0.3%, Germany’s DAX was 0.4% higher and France’s CAC 40 was 0.2% firmer.

At the same time, oil prices retreated. West Texas Intermediate was down 0.6% at $40.91 a barrel and Brent crude was down 0.6% at $42.43.

The BoJ kept interest rates steady on Friday but said it would increase its purchases of exchange-traded funds to an annual pace of Y6trn from Y3.3trn. It also doubled the size of a lending programme for local companies to $24bn.

David Morrison, senior market strategist at SpreadCo, said: “There was always a danger than the Bank of Japan (BOJ) would disappoint when it came to adding stimulus at the conclusion of its two-day meeting. And that’s exactly what’s happened.

“The consensus expectation was that the BoJ would announce further monetary stimulus to coordinate with the 28 trillion yen ($265 billion) fiscal stimulus that Prime Minister Shinzo Abe promised on Wednesday. Mr Abe wasn’t expected to reveal anything about the government’s spending programme until next week. The feeling was that by coming out early with a stimulus package which, size-wise, was at the high end of expectations, Mr Abe was putting pressure on the BOJ to come up with something equally accommodative on the monetary side.”

Corporate news kept investors busy on Friday. BBVA was on the front foot after it reported a 58% jump in second-quarter profit that beat expectations.

Kering was higher after the French luxury goods company’s first-half earnings surpassed estimates, while Group Casino nudged up a touch as the supermarket operator said first-half net profit rose to €2.58bn from €79m the year before.

Shares in Swiss bank UBS were in the black after it posted a drop in second-quarter profit that was better than analysts had expected.

Steel maker ArcelorMittal rallied as it posted better-than-forecast second-quarter numbers and reaffirmed its outlook for 2016.

Eni slid after the Italian oil and gas company said it swung to a loss in the second quarter, while Safran fell as its first-half results disappointed.

Pharmaceutical group Sanofi was also in the red after saying sales and profit declined in the second quarter.

Barclays was higher. Although it posted a drop in first-half profit, the results were better than expected.

Consumer goods group Reckitt Benckiser was in the red after it reported a drop in first-half pre-tax profit but a rise in revenue, as it reaffirmed its full-year net revenue target at the lower end of its guidance range.

Pearson was also on the back foot after the education company’s first-half sales and revenue missed consensus estimates.

British Airways and Iberia parent International Consolidated Airlines flew lower after cutting its 2016 profit outlook.