Europe open: Stocks rise as blue chip earnings impress

24th Oct 2024 08:06

(Sharecast News) - European stocks rebounded on Thursday after three days of losses as investors digested a raft of upbeat corporate earnings and awaited a series of key economic indicators.

By 1010 CEST, the Stoxx 600 was up 0.6% at 521.7, with solid gains across all major indices.

The pan-European benchmark had been falling since hitting a four-week high of 524.99 on Friday - its highest close since reaching a record of 528.08 on 27 September - on the back of rising political uncertainty ahead of the US elections, and nervousness around the future path of monetary policy worldwide.

A barrage of purchasing managers' indices (PMIs) from across the globe were set to steal the limelight on Thursday.

Out first was the flash reading of the eurozone composite PMI, which edged higher to 49.7 from a seven-month low of 49.6 in September, meeting consensus forecasts. Service-sector growth slowed unexpectedly, but the decline in manufacturing wasn't as bad as feared.

Later on, PMIs from the UK are expected to reveal that growth in both the services and manufacturing sectors tailed off slightly this month, while PMIs from the US were forecast to show little change.

With the World Bank and IMF meetings still taking place in Washington DC, scheduled speeches from a number of prominent policymakers will also be watched closely by investors, with both Cleveland Fed president Beth Hammack and Bank of England governor Andrew Bailey on the docket.

Corporate earnings impress

London-listed IT infrastructure services provider Softcat was a high riser on the Stoxx 600, jumping 11% after impressing with its annual results, which showed "another year of strong growth and cash generation". The company revealed a special dividend payment, alongside a 6.4% increase in the full-year dividend.

Swedish online casino operator Evolution Gaming surged 10% after delivering third-quarter results ahead of analysts' expectations. Revenues were up 21% at €549m, while EBITDA jumped 30% to €415m, smashing the €354m estimate.

Meanwhile, Indivior was also a high riser, up 8% as the UK-listed pharma firm reassured investors by holding on to its full-year forecasts following a recent profit warning.

Results from UK banking group Barclays also pleased investors, with shares up 3%. The bank nudged up its net interest income guidance for the full year after a solid third quarter, and said it was on track to deliver on its short and medium-term financial metrics.

Hermes was also lifting sentiment in the high-end fashion sector after reported 11% growth in third-quarter sales despite a global slowdown in the demand for luxury goods.

Leading the fallers was French vouchers and benefits cards firm Edenred, tumbling 15% after warning that potential regulatory changes in Italy - namely a 5% cap on meal voucher commissions paid by merchants - could hit EBITDA by €60m in 2025 and €120m on an annual basis going forward.