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European stocks bounce back as strong earnings in focus
August 30, 2017 / 7:30 AM / 23 days ago

European stocks bounce back as strong earnings in focus

LONDON, Aug 30 (Reuters) - Investors piled back into European stocks on Wednesday, boosting indexes higher in a relief rally after geopolitical concerns caused a sharp dip across equity markets.

The pan-European STOXX 600 gained 0.6 percent, recovering nearly all the ground lost in the previous session when North Korea’s missile launch sparked a sell-off.

Euro zone stocks and blue-chips rose in line.

Banking stocks, which had led the risk-averse move lower on Tuesday, were the strongest performers, up 0.9 percent, helping Italy’s bank-heavy index outperform.

Investors’ focus turned back to encouraging earnings news on Wednesday, driving gains across all sectors.

Shares in German broadcaster RTL jumped 6.3 percent to the top of the STOXX after it boosted second-quarter revenue, beating expectations despite an advertising market it called challenging.

RTL helped the media sector gain 0.8 percent, recovering from the nine-month low hit in the previous session after broadcaster Prosiebensat cut its outlook for advertising revenues.

French medical equipment supplier Biomerieux rose 3.4 percent after raising its 2017 forecasts, bolstered by a strong first half.

Stronger first-half profit and growing business volume helped Swiss insurer Baloise shares gain 5.2 percent.

One weak spot was Swedish property developer JM whose shares sank 4.6 percent after Norwegian building association OBOS said it sold all its shares in the firm.

Though European stocks have seen some sharp moves in recent weeks, punctuating an unusually calm year, sell-offs have tended to fizzle out as shares are supported by global investors’ continued confidence in the region’s economic growth and relatively cheap valuations compared to the U.S. market.

Earnings growth also provided support. With the majority of company reports through, Thomson Reuters data estimated earnings growth for the STOXX 600 at 16 percent year-on-year for the second quarter.

Reporting by Helen Reid, Editing by Kit Rees

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