European Stocks Rise as Focus Remains on Earnings, Fed Outlook

(Bloomberg) -- European shares climbed for a third day, with attention mostly on earnings and less hawkish comments from Federal Reserve officials.

The Stoxx Europe 600 gained 0.5% by the close in London. Nearly all sectors advanced, led by chemicals stocks, while retail and energy underperformed. Atos SE surged after Bloomerg reported defense company Thales SA is discussing teaming up with private equity on a potential takeover.

European equities have recovered more than half their losses since hitting a record high in early January. Signs the Federal Reserve won't be as aggressive as initially thought are aiding sentiment. Investors have also turned their focus on earnings, with Novo Nordisk A/S and Vodafone Group Plc both gaining after reporting on Wednesday.

The bounce in equities “will likely last for several weeks and eventually erase the entire drawdown in stocks year-to-date,” said Joachim Klement, head of strategy, accounting and sustainability at Liberum Capital. After weeks of worries, the Fed is “trying to catch and rein in runaway market expectations for a rate hike,” he said.

The recovery in growth stocks is likely to be more aggressive as earnings and trading updates confirm companies can stay resilient despite Fed rate hikes, Klement said. More firms are reporting that they've been able to deal with inflation and supply-chain issues, which should calm markets further, he said.

Among individual movers, Novo Nordisk and Vodafone gained after their results. Ocado Group Plc rallied after a double upgrade from Credit Suisse Group AG analysts. Meanwhile, Julius Baer Group Ltd. declined, with Citigroup Inc. saying that the wealth manager's second-half results showed a mixed bag.

MARKETS

Equities: Euro Stoxx 50 down 0.1%, FTSE 100 up 0.6%, DAX unchanged, CAC 40 up 0.2%, FTSE MIB up 0.6%, IBEX 35 down 0.2%, AEX-Index unchanged, Swiss Market Index unchanged
Bonds: German 10-year-yield unchanged at 0.03%, Italian 10-year-yield unchanged at 1.42%, Spanish 10-year-yield unchanged at 0.78%
Credit: iTraxx Main down 0.1bps at 57.6, iTraxx Crossover up 0.2bps at 281.5
FX: Euro spot up 0.23% at 1.1298, Dollar index down 0.35% at 96.05
Commodities: Brent crude down 0.8% at $88.5/bbl, copper up 1.4% at $9,833/MT, iron ore up 1.7% at $142.8/MT, gold up 0.5% at $1,809.37/oz

EUROPE EQUITIES

16 out of 20 Stoxx 600 sectors rise; financial services sector has the biggest volume at 150% of its 30-day average; 412 Stoxx 600 members gain, 183 decline
Top Stoxx 600 outperformers include: Atos +8.2%, Ringkjoebing Landbobank +7.3%, Ocado Group +5.7%, Ambu +4.9%, Lifco +4.6%
Top Stoxx 600 underperformers include: Julius Baer Group -5.7%, Antofagasta -5.7%, Telenor -5.6%, Swedbank -5.2%, Orpea -3.7%For a daily wrap highlighting the biggest movers among EMEA stocks, click here
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