All eyes on European earnings, Kering shares jump after sales surge
LONDON (Reuters) – Earnings remained the main driver of European stocks on Wednesday, with luxury conglomerate Kering shining after sales at Gucci surged once again, while benchmarks were muted as investors awaited the European Central Bank meeting.
The pan-European STOXX 600 <.STOXX> steadied, while euro zone blue chips gained 0.2 percent. France’s CAC 40 <.FCHI> rose 0.2 percent thanks to strong gains from Kering.
Euro zone banks <.SX7E> were up 0.5 percent, building on the previous session’s gains as investors anticipated Thursday’s European Central Bank meeting for the next catalyst for financials, which benefit from a rising rate environment.
Earnings disappointments drove the biggest moves. Overall results have been somewhat underwhelming so far, with Thomson Reuters data showing fewer companies beating analyst estimates than in the average quarter, though just 50 have reported.
Ballpoint pens and razor maker BIC <BICP.PA> sank 10.6 percent, hitting a four-year low, after nine-month sales figures came in under consensus. The shares had already suffered sharp losses after a cut to sales expectations in late September.
Finnish industrials firm Wartsila <WRT1V.HE> fell 5.5 percent after it missed earnings expectations.
Leading gains was luxury conglomerate Kering <PRTP.PA> after reporting sales surged once again thanks to yet another forecast-beating performance from its brand Gucci, boosting the stock up 6.2 percent at the open.
Luxury peer LVMH <LVMH.PA> also gained 0.6 percent. Retail and consumer goods sectors outperformed, up 0.4 to 0.7 percent.
Overall earnings for the STOXX 600 are set to grow 3.4 percent this quarter compared with the same period in 2016, the latest Thomson Reuters data showed, though that figure falls to flat earnings growth when energy stocks are stripped out.
(Reporting by Helen Reid; Editing by Georgina Prodhan)