European Stocks Close Higher As Focus Shifts To Earnings

European stocks closed higher on Thursday, riding on some upbeat quarterly earnings reports, and on continued optimism about a swifter global economic recovery amid faster rollout of vaccination and expectations of additional U.S. stimulus.

Outlook for additional stimulus has got a major boost from a surprisingly soft reading on core U.S. inflation and dovish comments by Federal Reserve chairman Jerome Powell.

Powell said he wanted to see inflation at 2% or more before even thinking of tapering the bank's super-easy policies.

The pan European Stoxx 600 ended up 0.46%. The U.K.'s FTSE 100 edged up 0.07% and Germany's DAX advanced 0.77%, while France's CAC 40 edged down marginally and Switzerland's SMI advanced 0.25%.

Among other markets in Europe, Denmark, Finland, Greece, Iceland, Netherlands, Norway, Poland, Russia and Sweden closed higher.

Austria, Belgium, Czech Republic, Ireland, Portugal, Spain and Turkey ended weak.

In the UK market, Coca-Cola HBC rose 4.65%, Intertek Group gained 3.65%, Avast advanced 3.2%, while Smith DS and Burberry Group both ended higher by about 3%.

Relx, Pershing Square, Halma, Johnson Matthey, ICP, M&G, Whitbread and Ocado Group also ended sharply higher.

On the other hands, Royal Dutch Shell, Land Securities, Anglo American, Natwest Group, GlaxoSmithKline, British Land Company, Barclays Group and Lloyds Banking Group ended lower by 1 to 2.3%.

In the German market, Adidas gained over 5%, Infineon Technologies and Fresenius Medical Care moved up by about 3.5% and 3.2%, respectively, while SAP, HeidelbergCement, Lufthansa, Deutsche Post, Volkswagen and Thyssenkrupp gained 1 to 2%.

In France, Credit Agricole shares surged up nearly 5% after the bank reported lower provisions and a larger-than-expected return to dividends.

Danone rose sharply after U.S. investment group Artisan Partners added its voice to calls for structural change at the company.

STMicroElectronics gained about 3.5%. Schneider Electric rose sharply after proposing a dividend increase despite posting a decline in 2020 net profit.

Technip, WorldLine, Veolia, Teleperformance, Hermes International and CapGemini also ended with strong gains.

Unibail Rodamco plunged more than 10% after posting a full-year net loss, the mall operator said it will not pay a dividend for three years. Pernod Ricard lost more than 2% after reporting lower sales and earnings in the first half of its fiscal year. Legrand, ArcelorMittal and Sanofi also declined sharply.

In economic releases, U.K. house prices continued to increase while there was a general weaker trend in sales market at the start of the year, the Royal Institution of Chartered Surveyors said.

Germany's wholesale price index remained unchanged year-on-year in January, after a 1.2% decrease in December, data from Destatis said.

Prices of scrap and residues rose 34.2% yearly in January and that of grain, raw tobacco, seeds and animal feed gained 9.5%.

On a monthly basis, the wholesale prices rose 2.1% in January, following a 0.6% growth in the prior month. This was the highest since March 1974, when prices climbed 3%.

The near-term outlook for the euro area looks weaker than expected last autumn, as the pandemic tightened its grip on the region, the European Commission said in its interim Winter forecast, released Thursday.

The currency bloc is forecast to grow 3.8% this year, instead of 4.2% projected previously. Meanwhile, the outlook for 2022 was raised to 3.8% from 3%.

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