European stocks reach six-week highs as Nestlé shines

Strong results from Swiss group boost food stocks, offsetting losses elsewhere

European shares closed at six-week highs on Wednesday as strong results from Nestlé boosted food company stocks, helping outweigh losses after a clutch of disappointing earnings including luxury group Kering and chipmaker ASML.


The Iseq closed 0.5 per cent higher as it was lifted by gains for CRH, Smurfit Kappa and Kerry.

Building materials group CRH added 0.7 per cent to close at €41.35, while packaging company Smurfit Kappa rose 1.8 per cent to €43.80 and Kerry advanced 2.7 per cent to €117.10 as European food stocks climbed.

This offset slippage in Ryanair, which fell 1.3 per cent to €16.12 on a poor day for airline stocks across Europe.


It was a weak session, too, for financial stocks, with AIB sliding 1.8 per cent to €2.37 and Bank of Ireland closing 2.4 per cent lower at €5.11.


The FTSE 100 edged higher on Wednesday, helped by gains in consumer companies and data showing a modest easing in domestic inflation, although a slide in mining stocks capped the advance.

Reversing an earlier fall of 0.25 per cent, the blue-chip index scraped into the green to close 0.1 per cent higher, with consumer staples such as Diageo, Unilever and British American Tobacco among top gainers.

The UK mining index fell 1.2 per cent in its worst session in two weeks as industrial metals prices fell on China’s pledge to bring down coal prices amid an energy squeeze in the country.

Rio Tinto, the world's biggest iron ore miner, dropped 3.3 per cent after it raised its capital spending plans for next year and announced a $7.5 billion plan to reduce carbon emissions by 50 per cent by 2030.

The mid-cap FTSE 200 index was down 0.4 per cent, with travel stocks such as TUI, EasyJet and Wizz Air underperforming again amid fears of a new wave of Covid-19 infections.

Deliveroo rose 3.8 per cent after it lifted its full-year growth forecast and reported a jump in the gross value of its orders in the third quarter.

Food giant Unilever, which is due to give a trading update on Thursday, edged up 0.8 per cent after a positive financial statement from rival Nestlé.


The pan-European Stoxx 600 index ended 0.3 per cent higher, with oil stocks also aiding gains as crude prices recovered slightly.

Swiss food giant Nestlé gained 2.7 per cent on an upbeat sales outlook after strong coffee sales and price hikes pushed organic sales 6.5 per cent higher in the third quarter.

Kering tumbled 0.6 per cent as sales growth at its star fashion brand Gucci missed analysts' expectations due to a sharp slowdown in its pace of recovery, particularly in Asia.

ASML Holdings, a key supplier to computer chip makers, fell almost 4 per cent after its fourth-quarter sales forecast fell short of some analysts' estimates.

Drugmaker Roche beat revenue expectations and raised its 2021 sales forecast amid pandemic-driven demand, but its shares were down 1.6 per cent.

Dutch paints and coatings maker Akzo Nobel slipped 1.3 per cent as its quarterly earnings were hit by continued raw-material inflation and supply-chain disruptions, which it expects to continue through mid-2022.


The S&P 500 and the Dow inched closer to record highs in early trading after strong forecasts from healthcare companies Anthem and Abbott, while the Nasdaq lagged as technology stocks took a breather.

The Dow Jones Industrials Average was just short of all-time highs reached in mid-August, while the benchmark S&P 500 index traded 0.2 per cent below its early September record.

Abbott Laboratories rose 2.9 per cent after raising its full-year profit forecast on a rebound in Covid-19 test sales. Anthem jumped 7.2 per cent and Biogen added 0.3 per cent after both healthcare companies raised their full-year earnings forecasts. – Additional reporting: Reuters