EUROPEAN shares advanced on Friday (Jul 12) and logged their second consecutive weekly gains on upbeat earnings and global investor optimism about a September interest rate cut by the Federal Reserve.
The pan-European Stoxx 600 index closed up nearly 0.9 per cent, while the euro zone blue-chip gauge advanced 1.3 per cent, both indexes hitting their highest levels in over a month on an intra-day basis.
Sweden’s Addtech hit a record high and jumped 16 per cent after the technical solutions firm said the outlook for the next quarters was favourable, while Ericsson rose 4.3 per cent after the Swedish telecom gear maker beat profit and sales forecasts on demand pick-up in North America.
Sweden’s benchmark index housing the stocks climbed 2.2 per cent.
Norwegian Air surged 7.8 per cent after reporting second-quarter core earnings above market expectations despite slightly lower demand impacting ticket prices.
“While a robust Q2 reporting season could provide further near-term support for Stoxx 600 EPS (earnings per share) momentum, we expect this to give way to renewed downgrades as global growth momentum weakens in response to the lagged impact of monetary tightening and the fading of support seen last year from US fiscal stimulus,” strategists at BofA Global Research said in a note.
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The earnings season also kicked off in the United States with the big banks, including JPMorgan Chase, Wells Fargo and Citigroup, reporting their second-quarter results.
France’s CAC 40 advanced 1.3 per cent after a volatile week of elections, where leaders of the left-wing New Popular Front are currently discussing potential candidates for prime minister.
Meanwhile, consumer prices in France rose 2.5 per cent year-on-year in June, confirming its preliminary reading, while German wholesale prices fell by 0.6 per cent in June, compared with the same month last year.
Sentiment was also upbeat as investors remained firm on their bets of a September Fed rate cut after data on Thursday showed US consumer prices unexpectedly fell, even as figures on Friday showed producer prices rose more than expected in June.
Among other stocks, EMS Chemie slipped 4.9 per cent as the Swiss nylon manufacturer cut its 2024 sales guidance.
Axfood dropped 9 per cent to the bottom of the Stoxx 600, as quarterly earnings were negatively impacted by costs associated, with operational disruptions and restructuring of logistics.
Aker BP, which is partly owned by BP, reported a lower-than-expected profit for the second quarter and lowered its full-year output outlook. Shares of the Norwegian oil company climbed 3 per cent. REUTERS
