EUROPE’S main index ended on Wednesday at a record high as investors cheered strong earnings from the likes of beer maker Anheuser-Busch Inbev and Germany’s Siemens Energy, while mulling the possible timeline of major central bank rate cuts.
The pan-European Stoxx 600 ended up 0.3 per cent at a record, building on Tuesday’s more than 1 per cent jump.
Industrial stocks boosted the main index after Siemens Energy raised its 2024 outlook and announced a second-quarter results beat. The power equipment maker’s shares rose 4.7 per cent to lead gains on the German benchmark index .
Anheuser-Busch Inbev advanced 5.6 per cent after posting consensus-beating first-quarter earnings and confirming its 2024 outlook. The world’s largest beer maker was the top gainer in Belgium’s main index and was the biggest boost to the Stoxx’s food and beverages index, which rose 1.6 per cent to lead sectoral advances.
German sportswear maker Puma advanced 11 per cent after first-quarter sales came in line with expectations, while supermarket group Ahold Delhaize rose 2.4 per cent after a first-quarter core profit margin beat.
Italy’s Leonardo rose 2.7 per cent on first-quarter orders and revenue growth. The broader aerospace and defence index rose 1.4 per cent.
GET BT IN YOUR INBOX DAILY
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Better-than-expected economic growth in China and Europe, and potential rate cuts from the European Central Bank suggest further recovery in earnings in coming quarters, Deutsche Bank analysts wrote.
The Stoxx 600 has pared losses from April as corporate earnings have been resilient, the European Central Bank is confident of a likely first rate cut in June and as Middle East tensions are ebbing.
Among data, industrial production in Europe’s largest economy declined lower-than-expected in March. Separately, the German economic institute IW noted the economy will stagnate in 2024 and continue to lag behind regional peers.
Belgian policymaker Pierre Wunsch said the European Central Bank can press ahead with interest rate cuts this year but needs to rethink how it forecasts inflation and sets policy based on these projections.
The monetary policy outlook beyond June remains uncertain.
BMW lost 2.9 per cent after its car segment’s first-quarter EBIT margin missed consensus, helping to pull the automobiles index down 1.3 per cent and making it among the worst sector performers.
Of the 185 Stoxx 600 companies to have reported first-quarter earnings to date, 61 per cent exceeded estimates versus the typical 54 per cent beat rate, weekly LSEG data showed on Tuesday.
Sabadell lost 4.3 per cent after BBVA told the smaller Spanish lender it was not planning to improve its all-share takeover offer.
Elsewhere, London’s benchmark FTSE 100 also closed at a record high of 20,491.99 points, ahead of the Bank of England’s policy decision due on Thursday. REUTERS
