Earnings help European stocks snap three-day losing streak

European Stock Markets

European shares rose on Thursday following three days of losses, supported by a flurry of mostly positive results and gains by banks after the U.S. Federal Reserve flagged higher interest rates later this year. 

U.S. stock futures were higher after Facebook (FB.O) forecast rising ad sales despite a dip in usage on the social media network. Equities, which have rallied sharply since the start of 2018, face a major test later on Thursday when three U.S. tech giants, Apple (AAPL.O), Google parent Alphabet (GOOG.O) and Amazon.com (AMZN.O), all announce earnings.

Back in Europe, oil major Royal Dutch Shell (RDSa.L) fell on disappointing fourth-quarter cashflow and insulin maker Novo Nordisk (NOVOb.CO) declined after its chairman quit and it reported operating profit below expectations.

 But several other big companies, from Nokia (NOKIA.HE) to Roche (ROG.S), Unilever (ULVR.L) and Dassault Systemes (DAST.PA), were up after their profit updates, helping the pan-European STOXX 600 benchmark index rise 0.7 percent by 0852 GMT.

The UK's FTSE .FTSE edged up 0.2 percent while Germany's DAX .GDAXI rose 0.6 percent.

On Wednesday, the U.S. Federal Reserve flagged interest policy tightening later this year and upgraded its inflation outlook at its policy meeting, its first in 2018 and last to be chaired by Janet Yellen.

“While last night’s final FOMC meeting of Fed chief Yellen turned out to be a touch more hawkish than expected, at the same time it delivered what markets like, namely certainty that the Fed is highly likely to raise rates in March,” said Markus Huber, trader at City of London Markets.

“In light of today’s flood of earnings in Europe and the US, the FOMC meeting will most likely have only a limited and temporary impact on markets,” he added.

Most European sectors were trading in positive territory with tech .SX8P stocks and banks .SX7P among the leading gainers, both up around 1 percent, while healthcare stocks .SXDP were weighed down by a 4 percent drop in Novo.

There was little cheer for Danish telecoms operator TDC’s (TDC.CO) decision to buy Swedish Modern Times Group’s (MTGb.ST) broadcasting and entertainment business in a $2.48 billion deal. TDC slumped 11 percent, the biggest faller on the Stoxx 600 index, while Modern Times gains 2 percent.

Still in earnings, NEX Group (NXGN.L) rose 8.4 percent to the top of the STOXX after revenues rose. The financial technology firm benefited from markets it said were ‘noticeably’ more active this year.

Bic (BICP.PA) fell 8 percent as Natixis cut its price target on the stock following its earnings update.

Overall fourth-quarter earnings for the STOXX 600 are expected to increase by 11.9 percent year on year, the latest Thomson Reuters data showed.

European shares get tech support, Hexagon soars on M&A talk

Recovering technology stocks gave European shares another leg up on Wednesday, while deal chatter sent Sweden's Hexagon soaring to a record high. 

The pan-European STOXX 600 benchmark and its euro zone counterpart rose 0.4 percent, in line with blue-chips with broad investor focus on the U.S. Fed rate decision later in the day in which the bank is widely expected to raise rates.

In the U.K., the FTSE 100 was little changed while midcaps rose 0.6 percent.

Hexagon stole the limelight, jumping more than 16 percent to a new record high after a Wall Street Journal report that the Swedish measurement firm was in talks for a potential sale to undisclosed buyers.

Technology stocks were the best-performing for the second session running, up 1.3 percent and clawing back after a nosedive fuelled by jitters over valuations, particularly in the U.S. Chipmakers Infineon, Dialog Semiconductor and ASML all gained 1.2 to 1.5 percent.

British housebuilder Bellway gained ground after its trading update showed robust demand for homes did not slow ahead of a national election on June 8. The builder's upbeat tone also lifted peers Barratt Development and Taylor Wimpey.

And Italian banks maintained their strength with Banco BPM was again among top Italian gainers after saying it would repurchase retail bonds from smaller Italian lenders for 123 million euros.

Meanwhile Euronext fell to the bottom of the European index after BNP Paribas and Societe Generale sold shares in the firm for 45 euros per share.

Euro zone industrial production data later in the day will give investors a steer on the underlying health of the economy, while British wage growth and unemployment figures could add to evidence of a squeeze on Britons' paychecks.