Euro markets gain in wake of corporate results

European markets closed higher on Thursday as global investors digested corporate results, new economic data and some slightly less hawkish messages from the US Federal Reserve.

The Fed yesterday raised interest rates by 0.75% as expected as it tries to tackle inflation without triggering a recession. Chairman Jerome Powell maintained an aggressive tone on containing inflation at a news conference afterward, but the central bank withdrew its guidance on the size of the next rate hike and acknowledged that “at some point” it would be appropriate to slow the pace of interest rates. increases.

Also in the US, the Bureau of Economic Analysis reported that economic growth fell 0.9% in the second quarter. The Dow Jones estimate was for a rise of 0.3%. The negative GDP marked the second straight quarter of contraction, an indicator that the economy may be headed for recession.

“While the market took gains on Wednesday, we don’t think a sustained improvement in sentiment is likely until the Fed sees enough evidence of easing inflation to signal that an end to rate hikes is in sight,” said Mark Haefele, chief investment officer at UBS . “While inflation is likely to ease in the coming months, it is likely to remain above the central bank’s targets. Data stretching back to 1975 suggests that value sectors tend to outperform when inflation is above 3%, which we expect that to be the case for some time. Additionally, growth stocks are still expensive relative to value stocks.”

The pan-European is on the board Stoxx 600 rose 1% with most indexes and major stock markets posting gains.

The British FTSE the German gained 0.01% to 7,348.85 points DAX and the French gained 0.88% to 13,282.11 points CAC 40 gained 1.30% to close at 6,339.21 points.

In the periphery the Italian FTSE Mib in Milan it increased by 2.10% and IBEX 35 in Madrid lost 0.49%.

Corporate earnings continued to drive the price movement of individual stocks in Europe, with a number of major companies reporting results before the bell on Thursday. These include Barclays, Shell, EDF, TotalEnergies, Stellantis, Leonardo, Prada, Diageo and BT.

THE Barclay’s posted a 48% drop in second-quarter profit after taking a major hit on a costly trading mistake in the U.S. The British bank reported net profit of 1.071 billion pounds ($1.30 billion) attributable to shareholders, meeting expectations of 1.085 billion pounds that was expected by analysts, according to Refinitiv. Barclays shares fell around 5% on the disappointing numbers.

The oil giants Shell and TotalEnergies extended their stock buying on Thursday after once again reporting record earnings on the back of a surge in oil and gas prices. The two companies plan to repurchase a total of $8 billion in shares in the third quarter.

The French pharmaceutical company Ipsen recorded strong sales in the first half, while shares in insurer Scor lost 19% of their value after reporting losses in the first half of the year.