Strong earnings spur rally across European stocks

Pan-European Stoxx 600 index closes up 0.6% but was below session highs

European shares moved further off six-week lows hit last session as forecast-beating results from companies including energy major TotalEnergies and automaker Volvo Car helped set aside worries about slowing global economic growth.

The pan-European Stoxx 600 index closed up 0.6 per cent, but was below session highs, hit by weak advance first-quarter US economic growth data as well as higher-than-expected German inflation spurring bets on a quicker pace of monetary tightening by the European Central Bank.

"Softer GDP numbers has raised fears that the US economy is not as immune to the global headwinds that are blowing as was previously thought," said Stuart Cole, head macro economist at Equiti Capital.

“It has been enough to see European stocks giving up some of their gains as overall the US figures have simply raised again worries over a global slowdown,” he said.

Dublin

Ryanair rose nearly 2 per cent to €14.56 despite a warning from a European aviation chief that soaring fuel costs could spark a rise in air fares and threaten to close some airlines.

AIB and Bank of Ireland each had a strong session, rising 3.7 per cent and 2.2 per cent respectively, as higher-than-expected German inflation spurred expectation of quicker monetary tightening by the ECB.

Paddy Power owner Flutter Entertainment traded flat despite shareholder disquiet about chief executive Peter Jackson's remuneration. Close to a third of shareholders disapproved of a motion on executive pay at the group's annual general meeting (AGM) on Thursday.

Cairn Homes rose 1 per cent as fresh figures showed the biggest pick-up in housing output in more than a decade.

Europe

April has been a volatile ride for stock markets globally, with the Stoxx 600 sinking to an over one-month low at one point on concerns over rising interest rates, valuations of US technology firms, the Ukraine conflict and China's Covid lockdowns.

But strong earnings saw the index rise on the day, with France's TotalEnergies gaining 3.7 per cent following plans to buy back its own shares after core earnings rose sharply on soaring oil and gas prices. Automakers rallied 2.2 per cent. Volvo Cars jumped 8 per cent after its profit beat analysts' forecasts as demand for its products remained strong.

Standard Chartered jumped 14.2 per cent after reporting upbeat quarterly earnings.

"The earnings season so far has been pretty supportive for corporates. It generally seems that they're able to continue to push through some of the costs through pricing," said Roger Jones, head of equities at London & Capital.

“But if there is a growth slowdown in the pipeline . . . how long [earnings strength] will persist is a very big question.”

London

London's markets climbed higher again as they were boosted by a robust session for the banks and financial stocks. Sentiment stayed strong after the Asian markets began the day brightly, with the Bank of Japan withstanding a global shift in tightening monetary policy.

The FTSE 100 ended the day up 83.85 points, or 1.13 per cent, at 7,509.19 points as it was buoyed by a raft of strong earning updates. Shares in Sainsbury's finished 10.3p lower at 228.7p as a result.

Standard Chartered, meanwhile, leaped to the top of the FTSE after the banking firm saw profits smash analyst estimates for the first quarter despite volatility in its core Asian market.

The London-based lender said profits had increased by 6 per cent over the period as trading income improved amid its pandemic recovery. It closed up 67.9p at 547.6p.

Barclays also made gains as it posted profits above expectations and said it was not seeing signs that borrowers are getting into repayment troubles and expects arrears to remain lower than before the pandemic.

New York

Wall Street's main indexes rose on Thursday as strong earnings from Meta Platforms lifted battered technology and growth stocks and offset concerns around a contraction in US economic growth in the first quarter.

The Facebook parent rose 14.3 per cent after it reported a stronger-than-expected profit and the social-networking site eked out user growth.

Seven of the 11 major S&P 500 sectors advanced by midday on the penultimate trading session of the month, with technology and communication services leading gains.

Apple, the world's most valuable company, and ecommerce giant Amazon both rose more than 2 per cent ahead of their earnings later in the day. – Additional reporting: Reuters