European stocks close higher as banks lead gains
European bourses ended higher on Tuesday as investors monitored earnings and awaited the start of a two-day policy meeting of the U.S. Federal Reserve.
The pan-European Stoxx 600 ended the day 0.41 percent higher with almost all sectors and major bourses in positive territory. Wall Street, meanwhile, was mixed. The Nasdaq moved lower while the S&P 500 hit a record high following a string of stronger-than-expected earnings.
Strength among commodity firms and banking stocks supported European shares during Tuesday deals while earnings season also remained front and center for investors.
Spanish lender, Banco de Sabadell, said Tuesday it had reinsured its life insurance portfolio which resulted in a net income of more than 235 million euros ($273.9 million). Its shares were over 3.85 percent higher on the news.
Elsewhere, British business media group, Informa, reported that first-half revenue rose over 40 percent amid strong trading in its global exhibitions system. Its shares were 2.7 percent higher on the news.
Meantime, Dutch paintmaker Akzo Nobel missed earnings forecasts on Tuesday and announced its chairman, Antony Burgmans, would resign in April next year. The company said its core profit in the second quarter slipped by 6 percent due to weak demand in various markets and higher raw material costs. The stock closed the day down 0.45 percent.
German business morale hit ‘euphoric’ levels
On the data front, German business confidence unexpectedly rose in July, hitting fresh record highs for the third consecutive month. The Munich based Ifo economic institute said its business climate index rose to 116.0, up from 115.2 in June.
“Sentiment among German business is euphoric … Companies’ satisfaction with their current business situation reached its highest level since Germany’s reunification,” Ifo Chief Clemens Fuest said in a statement.
Sticking with Germany, Volkswagen said it would hold a special supervisory board meeting on Wednesday in order to discuss allegations that German carmakers were involved in industry collusion, a source confirmed to CNBC via email. The autos sector closed under pressure in the previous session after reports the European Commission had opened an investigation into German carmakers accused of operating a wide-ranging cartel.
Meanwhile, oil prices extended gains on Tuesday after Saudi Arabia pledged to curb exports from next month and OPEC urged members to boost compliance with production cuts.
In the U.S., eyes turned to ongoing trade talks between the U.S. and the U.K. and Jared Kushner’s second day of an investigation by Congress over Russia’s involvement in the 2016 U.S. election. Market participants will also look to earnings and the Fed to gauge the health of the market and the projected pace of interest rate hikes.
Source: CNBC
