Tags: stocks | earnings | Europe | Fed

European Shares End Higher Amid Wave of Earnings Reports

Tuesday, 30 July 2013 12:58 PM

Europe's main stock markets ended the trading session higher on Tuesday, gaining strength from mostly upbeat company earnings and bright economic data, analysts said.

However, British bank Barclays saw a deep dent in its share price after it shocked the market by announcing a bigger-than-expected rights issue.

London's FTSE 100 index of leading companies finished the day up 0.16 percent to 6,570.95 points, while Frankfurt's DAX 30 rose 0.15 percent to land at 8,271.02 points.

In Paris, the CAC 40 added 0.45 percent to close at 3,986.61 points.

European business and consumer confidence edged up again in July, as other indicators also show improvement after months in the doldrums, official data signaled.

In another boost to the outlook, German consumer confidence continued to climb this month with growing expectations for economic growth and pay, a poll showed.

On the downside in London, Barclays shares closed 5.74 percent lower at 291.3 pence after it set out plans to raise 5.8 billion pounds ($8.9 billion, 6.7 billion euros) by offering shares at a massive discount to shareholders in order to meet demands from regulators.

The rights issue will be offered at almost half price and is part of a far bigger effort to plug a vast hole of 12.8 billion pounds in the balance sheet.

Barclays made the announcement as it reported first-half results which showed a quadrupling of net profit, but the scale and terms of the rights issue sent the share price plunging.

Another big faller in London was BP. Its shares sank 3.41 percent to end at 451.45 pence.

The energy giant said Tuesday that its replacement cost profit, which excludes gains or losses in the value of inventories, jumped to $2.4 billion in the second quarter, compared with $104 million last time around.

However, stripping out write-downs on the value of oil fields and refineries in the United States last year, underlying replacement cost profit sank 24 percent.

It also said it will have to put more money aside for its fund to compensate 2010 oil spill victims, and announced taking a stake in a consortium to build a trans-Adriatic gas pipeline.

Shares in British vehicle engineering group GKN surged 6.54 percent to 348.5 pence after posting a 12-percent surge in first-half sales, buoyed by its purchase of Volvo's aerospace engine division.

Shares in broadcaster ITV jumped 6.30 percent to 167 pence following news of rising interim profits.

In Frankfurt, shares in Deutsche Bank fell by 3.91 percent to 34.50 euros in response to a halving of net profit in the second quarter.


Shares in advertising group Publicis, which had jumped on Monday on a merger with U.S. group Omnicom, fell back to close 4.04 percent lower at 57 euros on the Paris stock exchange.

Analysts re-assessed the hurdles for the deal and the risk that the new entity might lose some customers. They cited the cases of rival firms Pepsico and Coca-Cola, each of which is a customer of one of the merging ad firms.

Shares in electricity group EDF surged by 7.39 percent on unexpectedly strong first-half profits.

Stocks in French telecom-equipment maker Alcatel-Lucent shot up by 14.41 percent to 1.83 euros after announcing earnings for the first six months of the year.

Although the company announced a big loss on restructuring charges, investors welcomed progress on its new strategy, sales as well as news of a new partnership.

Asian markets had mostly rebounded on Tuesday from the previous day's losses on bargain buying in cautious trade ahead of this week's closely watched policy meeting of the U.S. Federal Reserve.

© AFP 2019

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Europe's main stock markets ended the trading session higher on Tuesday, gaining strength from mostly upbeat company earnings and bright economic data, analysts said.
Tuesday, 30 July 2013 12:58 PM
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