European stocks inch higher on earnings; ECB meeting in focus

Bourses in Europe were higher during Thursday early trade, backed by a rise in global stocks, as investors awaited a rate decision by the European Central Bank (ECB).

The pan-European Stoxx 600 edged up 0.33 percent during early morning deals with major bourses in positive territory.

Almost all sectors were trading above the flatline shortly after the open with several companies reporting earnings for the second quarter of the year. Finnish ship technology and power plant maker Wartsila surged to the top of the benchmark in morning trade after better-than-expected earnings. The firm said it surpassed analyst’s projections on improving market demand for its marine solution business. Its shares were almost 7 percent higher on the news.

Meantime, Swiss engineering firm ABB reported a weaker-than-anticipated increase in quarterly net profits on Thursday amid overcapacity problems and higher raw materials prices. Its shares slipped over 2.5 percent.

Unilever reported marginally weaker-than-expected quarterly sales on Thursday, as the firm looked to recover from the fallout of a spurned $143 billion takeover bid earlier this year. Its shares moved almost 1 percent higher.

Price comparison platform Moneysupermarket slumped to the bottom of the benchmark on Thursday after it reported earnings for the first half of 2017. While the group posted a 3 percent rise in adjusted operating profit, Moneysupermarket warned investors it would likely be at the lower end of market consensus by year-end due to current trends in energy trading. Its shares dipped more than 10 percent lower.

ECB meeting

The euro was steady at $1.1505 on Thursday morning, ahead of the ECB meeting later in the session. The single currency had spiked to 14-month highs this week on the back of apparently hawkish comments by ECB President Mario Draghi.

The ECB is not expected to adjust interest rates on Thursday but it is projected to signal plans to slow down some of its asset purchases over the next few months.

Meanwhile, the second round of formal Brexit talks are set to continue on Thursday as negotiators from the EU and the U.K. meet in Brussels. Britain’s Brexit Secretary David Davis is expected to speak at a press conference later in the session.

Earlier in the trading day, the Bank of Japan kept its monetary policy unchanged after its two-day meeting. However, the central bank slashed its inflation forecasts for fiscal years 2017/2018 and 2018/2019.

U.S. stocks closed at record highs on Wednesday as investors digested better-than-expected earnings.

Source: CNBC