Publicis and industrials lead the pack as earnings dominate European stocks trading
Reuters
Published Apr 19, 2018 05:23AM ET
Publicis and industrials lead the pack as earnings dominate European stocks trading
By Helen Reid
LONDON (Reuters) - Advertising group Publicis and industrial stocks made gains on Thursday as strong results spurred them higher, while the main European indices stalled, showing signs of fatigue after a two-day rally took them to six-week highs.
Earnings dominated trading, with Swiss industrial equipment maker ABB (S:ABBN) and French electric components firm Schneider (PA:SCHN) the biggest boosts to the pan-European STOXX 600 (STOXX) index.
ABB rose 3.9 percent after reporting its best start to the year since 2015, while Schneider's profit beat sent its shares up 2 percent. Shares in ABB rival Siemens (DE:SIEGn) also rose 1.5 percent.
Advertising group Publicis (PA:PUBP) shone at the top of the STOXX after delivering a first-quarter sales beat helped by a rebound in North American activities.
Its shares jumped 6.1 percent, boosting the media sector (SXMP) up 0.8 percent.
"The fact we have now had a second agency group [after U.S. firm Omnicom on Tuesday] report top-line positive organic revenue growth should reassure on the secular concerns," said Liberum analysts.
Publicis' British rival WPP (L:WPP) also gained 3.4 percent as the results helped improve sentiment on agencies, which has been very negative.
A surge in metals prices, after Russian sanctions sparked concerns over global supply, lifted the basic resources index (SXPP) up 0.4 percent, having soared 4.3 percent on Wednesday.
Finnish steel firm Outokumpu (HE:OUT1V) gained 2.8 percent, reflecting a rise in Japanese steelmakers overnight after a summit between Prime Minister Shinzo Abe and U.S. President Donald Trump produced no bad news on tariffs.
Aluminium maker Norsk Hydro (OL:NHY) also rose 2.3 percent.
Overall the pan-European STOXX 600 (STOXX) hovered near six-week highs as a weaker healthcare sector outweighed gains in resources stocks.
Novartis (S:NOVN) shares fell 1.8 percent despite the Swiss drugmaker confirming 2018 targets. Baader Helvea analysts pointed to weaker first-quarter performance for its Sandoz drug in the U.S., and lower than expected profitability in the Innovative Medicine segment.
Results from Nestle and Unilever reignited concerns about large consumer goods firms' pricing power.
Unilever (L:ULVR) declined 2 percent after investors focused on weaker pricing which the Chief Financial Officer said was expected, due to difficulties in Brazil, North America and the UK.
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"We expect chronically weak pricing from both Unilever and Nestle to play to the market's fears of weak pricing power, fueled by channel shift, in the face of rising commodities," said Jefferies analysts in a note.
Nestle (S:NESN) shares barely budged despite the maker of Kit Kat chocolate confirming its outlook and saying volumes had picked up.
Tech stocks also held the STOXX back with chipmakers arms (S:AMS), Siltronic (DE:WAFGn), STMicro (MI:STM), and ASML (AS:ASML) all falling after Taiwan Semiconductor (TW:2330) reported weaker than expected results.
Merger and acquisition news also drove some big share price moves. Weir Group (L:WEIR) shares jumped 5.6 percent to the top of the STOXX after the firm agreed to acquire U.S. mining tools maker ESCO for $1.05 billion.
Written By: Reuters
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