Europe midday: Stocks push higher as investors sift through earnings
European stocks pushed higher, rebounding from heavy losses in the previous session following a late recovery on Wall Street, as investors waded through a deluge of earnings.
At midday, the benchmark Stoxx Europe 600 index was up 1.8%, Germany’s DAX was up 1.2% and France’s CAC 40 was 2.1% higher,
“European bourses are taking their lead from the late rally on Wall St shrugging off the slump in Chinese stocks overnight ahead of the G20 meeting in Shanghai,” said Andy McLevey, Head of Dealing at stockbroker Interactive Investor.
Oil prices were back under pressure again, although off earlier lows, amid ongoing concerns about oversupply, with West Texas Intermediate down 0.3% to $32.05 a barrel and Brent crude down 0.8% to $34.14. On Wednesday, data from the US Department of Energy showed crude stockpiles rose 3.5m barrels last week to an all-time peak above 507m.
In corporate news, Technip pushed up after the French oil services group maintained its dividend and released better-than-expected revenue for the fourth quarter of 2015, while insurer AXA was firmer after posting a 12% gain in 2015 profit.
Lloyds Banking Group surged after it hiked its dividend, although its pre-tax profit for the year was hit by more PPI charges.
RSA Insurance rocketed after its operating profit for 2015 beat analysts’ expectations.
BT Group rallied despite regulator Ofcom saying it may still need to spin off its Openreach infrastructure arm, unless it effectively opens up the network to rivals and implements major reforms.
On the downside, Repsol was in the red after posting a 25% rise in fourth quarter profit, while German consumer goods company Henkel slid despite reporting a jump in fourth quarter profit.
Brewer Anheuser Busch InBev was weaker after its fourth quarter numbers missed expectations.
British American Tobacco was on the back foot after saying full year profit rose but revenue fell.
Zodiac Aerospace, which makes seats for airplane manufacturers, tumbled, as it announced that its restructuring plan will take longer thought and the company will not meet its profit margin goal.
On the data front, Eurostat’s final reading on Eurozone inflation for January came in a little softer than originally estimated and still way off the European Central Bank’s target of just under 2%, adding weight to the argument for further stimulus.
The annual inflation rate in the euro bloc rose to 0.3% in January. This was below 0.2% the previous month and consensus and the initial estimate of 0.4%.
Dennis de Jong, managing director of UFX.com, said: “Mario Draghi will be concerned that inflation has dipped back down from last month’s 0.4% reading, which was the highest since October 2014, and there are a number of very real serious concerns for the ECB.
“Inflation was expected to have risen further by this stage, which heightens the likelihood of further stimulus as early as next month. Caution is very much the watchword for Draghi and co at present.”
Still to come, US initial jobless claims and durable goods orders are at 1330 GMT, while FHFA home prices are at 1400 GMT.