European stock markets edge higher after upbeat company earnings

European shares marked their longest winning streak since November 2021 on Wednesday, lifted by upbeat earnings, while optimism over China’s economic recovery boosted luxury stocks, with Hermes hitting an all-time high at one point.

In 2023 to date, Europe’s benchmark Stoxx 600 index has gained 7.7 per cent, with its upbeat start to the year spurred by easing price pressures as well as investors’ hopes of a rebound in China following Beijing’s relaxation of its strict Covid restrictions.

Dublin

The Iseq edged down 0.15 per cent. Ryanair was one of the stronger performers in the session, with the airline adding almost 1.2 per cent to finish at €14.84, while insulation company Kingspan rose 3.1 per cent to €60.08 and packaging group Smurfit Kappa added 0.6 per cent to close at €39.55.

But building materials group CRH slipped 0.3 per cent to €41.74 and Paddy Power owner Flutter Entertainment fell 0.7 per cent to €138.90.

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Kerry Group was also in the red, with the food company sliding 3 per cent to €88.66, while Bank of Ireland closed flat at €9.13.

London

The FTSE 100 nudged down almost 0.3 per cent as investors weighed December inflation data, which eased further from the previous month but still hovered in double-digit territory. The mid-cap FTSE 250 also slid about 0.3 per cent.

Basic material stocks, which houses miners such as Rio Tinto, were the top gainers, as iron ore and copper prices advanced on strong demand prospects out of top consumer China. Rio Tinto climbed 0.9 per cent.

British luxury retailer Burberry rose 3.3 per cent after chief financial officer Julie Brown said she was seeing “very promising” signs in China so far this month, even as the luxury group’s sales growth slowed to 1 per cent in the quarter ended December.

Shares of Currys rose 11.3 per cent after the retailer retained its recently downgraded full-year financial forecast.

Europe

The pan-European Stoxx 600 rose 0.2 per cent, extending gains for a sixth straight day on a boost from mining and technology stocks.

ASM International jumped 9.8 per cent after the Dutch semiconductor supplier reported fourth-quarter revenue ahead of its forecast, citing better-than-expected supply-chain conditions and higher conversion of the backlog.

Richemont rose 0.7 per cent on reporting higher quarterly sales as tourists returned to Europe and Japan. Still, the luxury group missed market estimates after sales in China plunged by almost a quarter.

Birkin bag maker Hermes closed up 0.2 per cent, having touched a record high earlier in the session.

In other earnings-driven moves, shares of Just Eat Takeaway.com rose 4.6 per cent after Europe’s largest meals delivery company said it eked out a profit at the operating level for 2022, sooner than analysts had expected, and will remain profitable in 2023.

Swedish private-equity firm EQT fell 6.1 per cent after missing full-year profit estimates.

US

Wall Street’s main indexes rose in early trading after weak retail sales and further evidence of slowing inflation supported hopes of smaller rate hikes by the Federal Reserve, while Tesla shares gained for the second straight day.

Tesla rose 1.5 per cent for the second straight session as analysts noted the electric-vehicle maker’s recent price cuts to top models gave it a competitive edge.

Microsoft rose 0.2 per cent after the company said it would cut 10,000 jobs by the end of the third quarter of fiscal 2023.

United Airlines Holdings rose nearly 1 per cent as it forecast at least a fourfold jump in full-year profit. Moderna rose 7.8 per cent after reporting data which demonstrated the effectiveness of its respiratory syncytial virus vaccine.

IBM was a drag on the Dow, falling 1.3 per cent after Morgan Stanley downgraded the company’s shares to “equal weight” from “overweight”, citing slowing revenue growth. – Additional reporting: Reuters