European shares advance on robust earnings

European shares advanced for a second session on Wednesday as the market cheered robust corporate earnings news and the US Federal Reserve reassured investors that it will only tighten monetary policy gradually.

Fed chair Jerome Powell continued testifying before US Congress on Wednesday, after saying the central bank will continue gradually hiking rates "for now" on Tuesday.

Technology stocks led gains as the pan-European Stoxx 600 index closed 0.5 per cent higher, after Ericsson AB and ASML Holding delivered strong results.

DUBLIN

The Irish market ended the session little changed, with the Iseq closing at 7,029.18. CRH was a bright spot, rising 1.6 per cent to €30.74, as the building materials group revealed that it had generated €510 million from the sale of its low-marking Benelux DIY retailing business and associated properties.

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Homebuilder Glenveagh Properties dipped by 5.3 per cent to €1.17 as investors absorbed the group's move to sell €213 million of shares at a discounted price to acquire further sites – as well as the company's main investor, US investment firm Oaktree, offering half of its 16 per cent stake in the company in the market.

Rival Cairn Homes managed to edge 0.2 per cent to €1.77, with fellow property-related plays, including Hibernia Reit, Green Reit and Irish Residential Properties Reit, also advancing.

Agri-services company Origin Enterprises gained 1.8 per cent to €6.25 after UK fund manager Artemis revealed that it has more than doubled its stake in the company to 8.4 per cent.

LONDON

A weaker pound helped Britain's top share index march higher as company earnings took centre stage with Smiths Group suffering.

The blue-chip FTSE 100 index climbed 0.7 per cent, in line with a broader rally among European stocks as the second quarter earnings season steps into gear.

Shares in EasyJet were among the top gainers, up 2.1 per cent, after the budget airline upgraded its full-year guidance and said that profit could jump by as much as 45 per cent in 2018.

At the bottom of the index Smiths Group was down 7 per cent after the engineering company said it expected full-year revenue at its medical unit to drop due to new EU regulation.

Shares in Royal Mail slid 4.5 per cent as brokers cut their price targets for the company following Tuesday's trading update.

Brexit developments and inflation data weighed on the pound, which in turn gave the FTSE’s dollar-earning constituents a boost.

Though prime minister Theresa May won a parliamentary vote earlier in the week and kept her Brexit strategy on track, divisions in the party deepened as she threatened Brexit rebels with a general election this summer if they defeated her plans for future customs arrangements.

EUROPE

The Cac 40 rose by 0.5 per cent in France and the Dax in Germany added 0.8 per cent, with auto stocks helped by reports that there will be talks next week between Europe and the US next aimed at cutting car tariffs.

Sweden’s Ericsson rose 8.5 per cent after reporting second-quarter results at the higher end of its previous guidance.

Biopharmaceutical group Swedish Orphan Biovitrum surged 13.9 per cent after reporting a 94 per cent surge in quarterly earnings.

However, paper and pulp maker BillerudKorsnas lost 15.7 per cent, after unveiling disappointing results.

NEW YORK

The benchmark S&P 500 hovered at five-month highs in early afternoon trading on Wall Street as a rise in financial and industrial stocks due to strong earnings from marquee companies were offset by a drop in technology stocks.

On a day when highly valued large tech stocks weighed on the market, Amazon. com became the second company after Apple to top $900 billion in market value, before retreating.

Morgan Stanley, which rounded off earnings from big banks, gained after its profit topped analysts’ estimates on gains in fixed income and equities trading businesses.

Industrial stocks were boosted by better-than-expected earnings reports from United Airlines.

The Dow Jones Industrial Average was up 0.2 per cent, at 25,181.18, the S&P 500 0.1 per cent higher, though the Nasdaq Composite dipped 0.1 per cent.

– Additional reporting, Reuters, Bloomberg