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Europe close: Stocks extend advance helped by strong corporate earnings

Wed 10 March 2021 17:31 | A A A

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7001.70 | Positive 38.37 (0.55%)

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(Sharecast News) - European shares were higher as strong corporate results from Quilter and Adidas offset falls in mining stocks due to weaker commodities prices.

The pan-European Stoxx 600 index edged up by 0.4% to 422.11, alongside a 1.11% advance for the Cac-40 to 5,990.55, while the German Dax added 0.71% to 14,540.25.

Euro/dollar was flat alongside to 1.1898 while front-dated Brent crude oil was down 0.82% to $66.97 a barrel on the ICE.

Iron ore prices were especially weak alongside, dragging the Stoxx 600 sector gauge for Basic Resources down by 1.59%.

Technology stocks were also lower, dropping 0.75%, despite a surge in their US rivals overnight.

"While yesterday's Nasdaq rally was a positive development it came against a backdrop of a drop in US 10-year yields. If it can continue to move higher in the face of higher rates then the rally might be more convincing, however the higher inflation narrative isn't likely to subside any time soon, which means any sustained Nasdaq rally could well be vulnerable to setbacks," said CMC Markets analyst Michael Hewson.

Elsewhere in equity markets, Spirax-Sarco shares rose 3.5% as the engineering firm reported a better-than-expected full-year profit on Wednesday, while revenues were in line after a stronger-than-anticipated fourth quarter.

Quilter shares were 9.3% higher as full-year results came in ahead of market expectations on Wednesday, with adjusted profit before tax on a continuing management basis falling to £168m from £182m.

German sportswear maker Adidas was up 6% after it forecast a strong rebound in sales in 2021, driven by China, the rest of Asia and Latin America following fourth-quarter results.

Shares in UK broadcaster ITV fell almost 4% as breakfast presenter Piers Morgan flounced off stage and later resigned over criticism of his remarks about members of Britain's royal family.

"Are they down because of this event or just amid his departure? Investors may be a little worried about the loss of ratings for GMB - it wasn't exactly doing that well before he joined and its primetime slot will have repercussions for ads," said analyst Neil Wilson.

"Love or loathe, Morgan boosted ratings. It could also be that investors are worried about an investigation over comments made by Morgan on air."

"Shares were hit yesterday after it revealed the way in which lockdowns have hit ad revenues, but indicated things are picking up and studios can drive new growth. Deutsche Bank today calls it a buy. You cannot be owning ITV and worry about one host, can you?"

Zara-owner Inditex slipped after it reported a 70% fall in 2020 net profit as a year of global lockdowns kept many of its shops shut.

Just Eat rose 6.1% as the food delivery company said it would keep up its investment drive after reporting surging sales and a wider annual loss.

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