European Shares Wobble Amid Mixed Earnings

Markets Reuters

European shares edged higher on Thursday, buoyed by the media sector after good results from Publicis, but weighed down by weakness in tech shares as a mixed earnings season picked up pace.

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Media stocks gained 1 percent, the top sectoral gainer, led by a 3.7 percent rise in Publicis. The French advertiser led the FTSEurofirst 300 after reporting a sharp acceleration in sales growth.

British peer WPP gained 2.7 percent, with traders citing readacross from Publicis' results.

Gains in media stocks reflected strength in many cyclical sectors sensitive to economic optimism. Travel stocks rose, led up by a 3.3 percent rise in easyJet after an upgrade by JP Morgan, and banks and miners were also firmer.

Such optimism was not reflected in the tech sector, however, with weakness from U.S. firm Intel compounded by below-expectation reports from, Ericsson and Nokia.

Tech stocks fell 1.1 percent, the biggest sectoral faller.

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The earnings season so far has seen 56 percent of companies having met or beaten expectations on the STOXX Europe 600 , according to Thomson Reuters StarMine data.

"It's been a real mixed bag over the last 24 hours, starting in the US and followed through in Europe this morning," Matt Basi, senior sales trader at CMC Markets, said.

"Our clients are keen on cyclicals... but tech stocks are higher price names, and you don't need much of a miss to see a sell-off."

The pan-European FTSEurofirst was up 0.2 percent at 1,201.61 by 10XX GMT, while euro zone blue chips in the Euro STOXX 50 also gained 0.2 percent.

Sentiment was supported by the relatively dovish tone struck by U.S. Federal Reserve Chairman Ben Bernanke in testimony to Congress on Wednesday, indicating that he would only slow asset purchases this year if economic data was good enough.

Volumes on the FTSEurofist were low, however, with just a quarter of the 90-day average traded by 1020 GMT, with investors keen to hold off on making firm bets ahead of a second day of testimony.

"The market interpreted his latest comments as 'good news' as after yesterday that September start date to tapering seems less likely," Alastair McCaig, analyst at IG, said.

"You would half anticipate on recent form that today he might contradict some of those comments from yesterday, however, so there may be some nerves on the back of that."