European shares snap seven-day losing streak



Wed, 07 Feb 2018 - 09:18 GMT


Wed, 07 Feb 2018 - 09:18 GMT

Traders work at Frankfurt's stock exchange in Frankfurt, Germany, February 6, 2018. REUTERS/Ralph Orlowski

Traders work at Frankfurt's stock exchange in Frankfurt, Germany, February 6, 2018. REUTERS/Ralph Orlowski

MILAN - 7 February 2018: European shares broke a seven-day losing streak on Wednesday as investors took heart from a strong bounce on Wall Street at the end of a rollercoaster session.

All sectors in Europe were trading in positive territory, helping the pan-European STOXX 600 index to rise 0.7 percent by 0851 GMT. The index is down 3.5 percent year-to-date.

Traders said further turbulence ahead could not be ruled out as volatility remained high in the wake of historic stock market declines caused by worries over inflation. Wall Street futures were pointing to a weaker open on Thursday.

“It remains too early for the moment to suggest that this might be the end to this particular bout of weakness,” said Michael Hewson, Chief Market Analyst at CMC Markets UK.

A number of well-received company updates also provided support.

Hexagon soared 7 percent to lead gainers on the STOXX after the Swedish industrial technology company reported fourth-quarter core earnings ahead of analyst forecasts.

Statoil rose more than 2 percent. The Norwegian oil producer said it would raise its dividend after beating fourth-quarter earnings forecasts, helped by higher oil prices.

“We see this as a decent set of numbers with some positive commentary on the growth portfolio, as well as guidance on significant FCF (free cash flow) to come through,” said analysts at RBC Capital Markets.

Miner Rio Tinto shares edged up 0.1 percent, paring back earlier gains as its record dividend fail to impress investors.

Delivery Hero and insurer Hannover Re also rose on the back of strong results.

Some disappointed, with ABN Amro falling 3.4 percent. The Dutch bank beat analyst expectations with a 63 percent jump in fourth-quarter net profit, but some traders voiced concerns over cash returns, saying it was light on capital.

Enzyme maker Novozymes and brewer Carlsberg also fell sharply following their updates.

According to Thomson Reuters data, 48.2 percent of STOXX 600 companies that have reported results so far exceeded earnings estimates. That’s below the 50 percent beat seen in a typical quarter. Revenue beats at 57.3 percent however are above a typical quarter.

Elsewhere, Tesco fell 0.7 percent after reports that the retailer is facing Britain’s largest ever equal pay claim and a possible compensation bill of up to 4 billion pounds.

Among country benchmarks, the UK’s FTSE added 0.6 percent, while Germany’s DAX rose 0.4 percent. The German index showed little immediate reaction to reports about developments between Conservatives and Social Democrats over a coalition government deal.



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