European stocks toast strong earnings, trade optimism

European indexes gained ground on Wednesday morning, with positive results and outlooks from chemicals manufacturer Akzo Nobel, Dutch brewer Heineken and French asset manager Amundi helping to lift sentiment.

How are markets performing?

The Stoxx Europe 600 SXXP, +0.34%  rose 0.4% to 364.1 on Wednesday morning, putting it on course for a third consecutive day of gains.

Italy’s MIB index I945, +0.55%   led the region, up 0.7% to 19944.8, while the U.K.’s FTSE UKX, +0.57%  climbed 0.5% to 7165.9 and Germany’s DAX DAX, +0.17%   index also rose about 0.5% to 11173.2.

The euro was slightly down at $1.1325 EURUSD, -0.0883% and the British pound GBPUSD, -0.0155%   also fell, by 0.04% to $1.2885.

What’s driving the markets?

In the U.S., President Donald Trump said he was willing to postpone next month’s deadline for imposing further 25% tariffs on trade with China “if we’re close to a deal”. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer are due to arrive Thursday for further discussions, and Chinese President Xi Jinping may meet with key members of the U.S. delegation on Friday, according to the South China Morning Post.

Trump also said Tuesday that a second U.S. government shutdown is unlikely. Meanwhile, in the U.K., investors had a tidbit of positive Brexit news to digest after a senior adviser to Prime Minister Theresa May let slip plans for a possible delay to the country’s EU departure. In Spain, the country’s minority government could be forced into a snap general election if it loses a key budget vote today.

What shares are active?

Europe’s biggest gainer on the day was French payment-technology firm Ingenico Group ING, +9.22%  , whose shares rose 7.5% to €51.18 after it announced a turnaround plan on February 12. Net profits fell 26% in 2018, with the firm’s new CEO admitting it had been a “challenging year”.

Other big gainers included Nordic tobacconist Swedish Match AB SWMA, +6.75%  , whose shares jumped more than 6% after it unveiled plans for expansion in the U.S., and online gambling company Kindred Group , up 6% after it reported a 13% rise in full-year profits.

Shares in Dutch chemicals group Akzo Nobel AKZA, +4.59%  gained 3.7% to €77.42 as investors took heart from a big profits boost and a €2.5bn share buyback programme. But shares in Swiss specialty chemicals maker Clariant AG CLN, -3.10%  dropped 3.4% after the firm reported a 2% drop in earnings in the fourth quarter, despite good results for 2018 as a whole.

Shares in Dutch brewing group Heineken HEIA, +4.97%  , the world’s second-largest beer manufacturer, rose 5.4% after it reported a slight fall in profits but said it expected growth in 2019 despite an “uncertain” economy.

Europe’s largest asset manager, Amundi AMUN, +4.52% gained 4.6% after the firm reported higher earnings despite a fall in its invested assets in the fourth quarter.

But elsewhere in Europe’s financial sector, Dutch banking group ABN Amro ABN, -7.17%  was the biggest faller in the Stoxx 600. Its shares dropped 6.9% after it said profits dropped 42% in the fourth quarter, worse than analysts were expecting, thanks to a surge in loan impairments.

U.K. oil-and-gas company Tullow Oil TLW, +4.45%  said it had returned to profit in 2018, sending its shares up 5.2%.

Also in the U.K., shares in homeware retailer Dunelm DNLM, +3.21%   gained 3.4% after it reported a 24% rise in profits for the six months to the end of 2018, but said it was stockpiling supplies against the risk of an acrimonious outcome from Brexit.

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