Strong results lift Europe’s STOXX 600 to nearly seven-week highs

The DAX chart of the German stock price index is pictured on the stock exchange in Frankfurt, Germany, July 21, 2022. REUTERS/Staff

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  • Atos tops STOXX 600 to secure funds for recovery plan
  • UniCredit jumps on improved guidance after strong second-quarter results
  • Adidas slips after prospect cut

July 27 (Reuters) – European stocks hit seven-week highs on Wednesday as a series of strong results from companies including Russia-exposed lender UniCredit and Britain’s Smurfit Kappa brought some comfort in an otherwise dark environment.

The STOXX 600 index (.STOXX) closed 0.5% higher as shares of French IT consultancy Atos (ATOS.PA) jumped 16.2% to top the chart. index on securing the financing of a recovery plan. Read more

UniCredit (CRDI.MI) gained 8.6% after raising its outlook for 2022 and moving forward with a share buyback plan it had put on hold, helping Italy’s MIB index (.FTMIB) outperform its benchmarks. peers with an increase of 1.5%. Read more

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Sentiment also improved after an upbeat outlook from Microsoft Corp (MSFT.O) and strong ad sales growth from Google’s parent company Alphabet Inc (GOOGL.O) overnight, with analysts also pointing to many disappointments in terms of profits were already factored into the ratings. Read more

“You can argue that was largely the case because in the second quarter we had a big downgrade in pretty much every market, there was a degree of disappointment,” he said. said Ian Williams, economist and strategist at Peel Hunt.

“It looks like investors may now be pricing the company’s updates more on a share-by-share basis amid concerns about growth, European gas supplies and the tightening that central banks will do to try to control inflationary pressures.

Second-quarter earnings for companies on the STOXX 600 are expected to rise 23.1% year-on-year, according to Refinitiv. Of the 35% who have reported so far, nearly 60% have exceeded estimates.

Russia has delivered less gas to Europe in a further escalation of an energy standoff between Moscow and the European Union that will make it harder and more expensive for the bloc to fill storage ahead of the winter heating season. Read more

There was also a focus on the US Federal Reserve’s interest rate hike plans, with markets widely expecting a 75 basis point hike. A statement from the US central bank is expected at 6:00 p.m. GMT, followed by Fed Chairman Jerome Powell’s press conference. Read more

The travel and leisure sector (.SXTP) rose 3%, benefiting from positive comments from Wizz Air (WIZZ.L).

Shares of the low-cost airline jumped 10.4% after its quarterly revenue more than quadrupled and it said travel demand was supporting higher ticket prices. Read more

French payments company Worldline (WLN.PA) climbed 13.8% on upbeat first-half results.

Smurfit Kappa gained 5.5% after Europe’s largest paper packaging maker posted a 50% jump in first-half core profit and increased its interim dividend. Read more

Miner Rio Tinto (RIO.L) slid 0.7% after a drop in first-half profit, while Adidas (ADSGn.DE) slid 5.1% after lowering its profit target for 2022, blaming a slower-than-expected recovery in China from pandemic restrictions. Read more

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Reporting by Susan Mathew and Devik Jain in Bengaluru; Editing by Shounak Dasgupta and Jonathan Oatis

Our standards: The Thomson Reuters Trust Principles.

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