European shares rise off 7-week low as telecoms earnings impress
London: Encouraging earnings from telecoms companies put European shares on the front foot on Tuesday, helping them recover from a seven-week low hit in the previous session.
The pan-European STOXX 600 was up 0.2 percent by 0720 GMT, also helped by gains in British retailer Tesco after the UK regulator approved its $4.9 billion takeover of wholesaler Booker.
Telecom and tech sector strength helped German and French benchmarks gain 0.4 percent, while euro zone blue-chips were up 0.3 percent.
German telecoms firm Drillisch was up 3.7 percent after it reported a 9.9 percent rise in nine-month revenues.
Vodafone was another standout stock in the sector, rising 4 percent after upping forecasts for full-year earnings growth after a strong first half.
Altice bucked the sector trend, sinking 7.2 percent after Morgan Stanley cut its price target on the stock by 34 percent, adding to pressure on the shares which are already down 46 percent this year.
Britain’s biggest retailer Tesco jumped 4.8 percent after receiving regulatory approval for its takeover of Booker. The latter’s shares also rose 4.9 percent.
Stronger than expected results also boosted Simcorp and Alstom, while asset manager Intermediate Capital Group soared 10.5 percent to the top of the STOXX index after reporting record inflows.
This earnings season has delivered surprisingly violent share price moves stocks after results, Goldman Sachs strategists said.
Earnings-day price moves have been more than 3.5 times the average daily move – the most extreme results reactions the bank had data for.
As the earnings season neared its end, MSCI euro zone companies were tracking 9.9 percent year-on-year earnings growth in U.S. dollar terms, and 62 percent of companies in the euro zone index had beaten or met earnings estimates.