European Markets Bounced Back On Earnings Strength

(RTTNews) - The European markets ended Wednesday's session in the green, rebounding from yesterday's weak performance. Solid financial reports from companies like SAP, Lonza and ASML Holding, as well as Microsoft and Morgan Stanley in the U.S., provided a boost to investor sentiment. However, mining stocks lagged behind following some disappointing production updates.

Investors are looking forward to Thursday's announcement from the European Central Bank. Many economists expect the tone of the statement to be dovish in light of the Brexit outcome.

U.K. businesses do not expect any major impact from the "Brexit" in the near term, though uncertainty had risen significantly, the Bank of England said Wednesday.

"A majority of firms spoken with did not expect a near-term impact from the result on their investment or staff hiring plans," the central bank said in its updated Agents' summary of business conditions report.

"But around a third of contacts thought there would be some negative impact on those plans over the next twelve months."

As yet, there was no clear evidence of a sharp general slowing in activity, the bank added.

The Euro Stoxx 50 index of eurozone bluechip stocks increased 1.22 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 1.00 percent.

The DAX of Germany climbed 1.61 percent and the CAC 40 of France rose 1.15 percent. The FTSE 100 of the U.K. gained 0.47 percent and the SMI of Switzerland finished higher by 1.06 percent.

In Frankfurt, software giant SAP climbed 5.67 percent after reporting better-than-expected quarterly operating profit and affirming its full-year guidance.

Semiconductor manufacturer Infineon Technologies added 1.80 percent after Microsoft's quarterly earnings topped expectations.

Bayer dipped 0.08 percent as U.S. seed company Monsanto rejected a second takeover bid from the German drugs and chemicals giant, calling the $64bn cash offer 'financially inadequate.

Volkswagen advanced 5.88 percent. The company announced that operating result before special items for the first six months of 2016 totaled 7.5 billion euros.

In London, Johnson Matthey gained 0.89 percent after announcing a solid set of quarterly results and reaffirming its fiscal 2017 guidance.

Mining giant BHP Billiton fell 2.33 percent after falling short of its full-year iron ore production targets.

Anglo American sank 4.41 percent. The miner cut its annual target for copper output and also trimmed its target for Brazilian iron ore.

Precious metals miner Fresnillo lost 2.88 percent despite raising its full-year gold production forecast.

Admiral Group gained 2.84 percent after UBS upgraded its rating on the stock to "Buy" from "Neutral."

Lonza Group jumped 5.79 percent in Zurich, after the specialty chemicals and life sciences group raised its annual guidance after reporting the strongest earnings growth in its history during the first six months.

Semiconductor equipment maker ASML Holding increased 2.79 percent in Amsterdam after reporting a better-than-expected quarterly profit on higher sales.

Electrolux sank 5.98 percent in Stockholm. Second quarter net sales declined 4 percent to 29.983 billion kronor from 31.355 billion kronor a year ago.

Consumer confidence in the 27 European Union countries decreased sharply in July after the "Brexit" vote late last month, while the indicator for the euro area eased moderately, preliminary data from the European Commission showed Wednesday.

The consumer confidence index for the EU countries, excluding the U.K., fell by a marked 1.8 points to -7.6.

The euro area current account surplus declined to a 3-month low in May, the European Central Bank reported Wednesday. The current account surplus fell to EUR 30.8 billion in May from 36.4 billion in April. This was the lowest level since February.

Germany's producer prices declined at a slower pace in June, data from Destatis showed Wednesday. The producer price index fell 2.2 percent year-on-year in June, following a 2.7 percent drop in May. Economists had forecast a 2.4 percent decrease in prices.

The U.K. unemployment rate fell to the lowest level in more than 10 years in the three months to May, reflecting strength in the labor market ahead of the 'Brexit' vote. The unemployment rate fell to 4.9 percent in the three months to May from 5.6 percent a year earlier, the Office for National Statistics said Wednesday.

The jobless rate was expected to remain at 5 percent, the same as in the three months to April. The last time the figure was lower was in July to September 2005.

British households' finance outlook worsened substantially in July to the weakest level in two-and-a-half years, in line with rising economic and political uncertainty following the EU referendum vote, results of a survey by Markit Economics and financial information provider Ipsos Mori revealed Wednesday.

The seasonally adjusted Markit UK Household Finance Index, or HFI, fell to 44.3 in July from 44.8 in the previous month.