European shares climb higher as earnings brighten sentiment
Reuters
Published Jan 25, 2017 10:12
European shares climb higher as earnings brighten sentiment
By Atul Prakash
LONDON (Reuters) - European shares climbed higher on Wednesday, with strong updates from companies such as computer peripherals maker Logitech (S:LOGN) and Spain's Banco Santander (MC:SAN) boosting the broader equity market.
The benchmark STOXX 600 index (STOXX) was up 1 percent by 1000 GMT and poised for its best day in six weeks.
The European banking index (SX7P) rose 1.9 percent, the top riser in the STOXX 600 index. Banco Santander led the sector higher after reporting a 4 percent rise in its 2016 net profit as improved results in Brazil helped offset a weak performance in Britain. Its shares rose 4.6 percent to its highest level since August 2015.
Banco Santander helped Spain's IBEX share index (IBEX) to rise 1.8 percent to its highest level in more than one year.
"The earnings outlook for European banks has improved in the past months, with a recovery in economic growth and the interest rate environment supporting sentiment," said Koen De Leus, chief economist at BNP Paribas (PA:BNPP) Fortis.
"European shares look relatively attractive on valuation grounds and a weaker euro is good for the region's exporters. I am positive on the market's outlook and company earnings."
The broader stock market was boosted by several individual companies that reported solid results.
Logitech hit its highest level since late 2008 and was last quoted more than 13 percent firmer after the company reported a jump in quarterly earnings and raised its outlook. It also recorded a forecast-beating 13 percent rise in quarterly sales, the highest in the company's 35-year history.
Britain's WH Smith (LON:SMWH) rose more than 7 percent after saying it expected full-year profit growth to be slightly ahead of expectations as it posted strong sales in its travel business over the Christmas period.
The positive momentum also helped BT Group (L:BT), which rose 0.7 percent after losing a fifth of its value in the previous session following a cut to its financial forecasts.
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Chilean mining firm Antofagasta (L:ANTO) rose to its highest level since early 2014 and was last quoted 4.7 percent higher after saying that higher output at its Centinela mine and additional copper from two new operations drove up its 2016 production.
However, Wednesday was not a good day for some companies.
Restaurant Group (L:RTN), which operates more than 500 restaurants and pubs in Britain, fell nearly 10 percent after the mid-cap company's sales fell last year and the owner of the Frankie & Benny's chain said that a hike in Britain's minimum wage will drive costs higher in 2017.
Written By: Reuters
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