European Markets Gain on Positive Earnings and Greek Outlook

Lucy Stoeva
10 May, 2016
New York City

European shares advanced on Tuesday as positive developments in Greece

[R]4:00 PM Frankfurt, Germany – European shares advanced on Tuesday as positive developments in Greece’s debt negotiations and solid corporate earnings reports offset weak economic data. Credit Swiss posted better-than-expected results. Volkswagen is reportedly moving closer to fixing the vehicles related to the emissions scandal.[/R]

European shares advanced on Tuesday as positive developments in Greece’s debt negotiations and solid corporate earnings reports offset weak economic data.

In Greece, the Athens Composite Index gained 3.2% to 629.29 after the euro zone finance ministers approved changes in pension and tax reforms and ministers are likely to release bailout payment.

Eurobank Ergasias was the top gainer in Athens, up 13.6%.

Danish jeweler Pandora jumped 11.2% after a positive surprise in its first-quarter operating profit. The company also upgraded its full-year forecast.

Volkswagen soared 4.2% after the auto maker is reportedly moving closer to fixing the diesel vehicles in the U.S. related to the emissions scandal.

Credit Suisse gained 5% after the bank posted a lower-than-expected loss despite difficult market conditions.

Capita added 5.3% after the British outsourcing company projected organic revenue growth of at least 4% this year.

Shares of energy companies rose as oil prices pushed higher. Brent crude oil futures climbed 3.6% to $45.19 per barrel, while WTI crude oil futures added 2.07% to $44.34 per barrel.

Among oil shares, Tullow Oil gained 2.8%, Subsea 7 edged up 2%, Repsol rose 1.9%, and BP advanced 1.7%.

In Germany, industrial production unexpectedly dropped 1.3% in March from the previous month, the Ministry of Economics said, as both manufacturing and construction output fell.

However, industrial production was up 1.8% in the first-quarter compared to the previous quarter due to a strong start to the year.

In separate news, the German statistical agency Destatis announced that the trade surplus reached a record high of 23.6 billion in March, record since data gathering began in August 1990.

The trade surplus was driven by 1.9% increase in exports and 2.3% decrease in imports.

In France, industrial production dropped 0.3% in March from the previous month on weaker output in manufacturing, transport and food, the French statistical agency Insee said.

In London, the FTSE 100 gained 41.84, or 0.68%, to 6,156.65, while in Frankfurt, the DAX index added 64.95, or 0.65%, to 10,045.44.

In Paris, the CAC 40 index rose 15.40, or 0.36%, to 4,338.21.

Adecco SA plummeted 5% to 58.75 Swiss francs after the staffing company said net income fell 10% to €144 million from a year earlier.

First-quarter organic revenue rose 4% to €5.3 billion as solid growth in France and Italy offset sluggish sales in North America.

Credit Suisse AG jumped 5% to 14.10 Swiss francs after the bank posted a smaller-than-expected quarterly loss of 302 million Swiss francs amid restructuring and difficult market conditions.

EasyJet PLC rose 2.7% to 1,510 pence after the budget airline raised its dividend payout from 40% of annual earnings to 50%, starting this financial year.

The airline reported a loss of £24 million for the half-year, compared with profits of £7 million for the same time last year, mainly due to exchange rate losses as the pound fell against the euro.

Sales increased 0.3% to £1.77 billion over the last year, while passenger numbers grew from 28.9 million to 31 million.

Natixis SA slid 6.9% to €4.1 after the French financial company reported worse-than-expected first-quarter results.

CEO Laurent Mignon said the bank is revising its strategy in an effort to boost efficiency.

First-quarter net income fell 30% to €200 million, while revenue slipped 6% to €2.06 billion.

Revenue at the corporate and investment banking unit fell 3% to €782 million, with income from trading fixed-income securities was down 11%.

Revenue from structured financing fell 9%. In asset management, revenue declined 2%, while insurance sales rose 19%.

Pandora A/S jumped 11.2% to 948.5 Danish kroner after the jeweler posted a positive surprise in first-quarter operating profit and sales.

First-quarter EBITDA was 1.76 billion kroner, boosted by 58% growth in Asian sales.

The company upgraded its full-year forecast and now expects sales to exceed 20 billion kroner, up from a previous forecast of 19 billion kroner. EBITDA margin is forecast at 38%, compared to 37% previously expected.

UniCredit S.p.A fell 1.5% to €2.95 after posting a slight decline in its core capital. The fully-loaded CET 1 ratio was 10.85% at the end of March, compared with 10.94% at the end of 2015.

Net profit was €406 million, down €512 million a year earlier, due to €260 million in gross restructuring costs in Italy and Austria.

Revenue from fees and commissions rose 0.6% in the quarter despite turbulent financial markets.