Europe close: Frankfurt drags region lower after raft of earnings

(Sharecast News) - European shares closed lower on Thursday as investors worked through a heavy slate of corporate earnings, a renewed surge in precious-metal prices and heightened geopolitical tensions, while central banks on both sides of the Atlantic kept policy steady.

The pan-European Stoxx 600 reversed earlier gains to close down 0.22% at 607.16, with gains in London and Paris more than offset by losses in Frankfurt.

Germany's DAX fell 2.13% to 24,293.24 after Europe's largest economy cut its growth forecasts for this year and 2027, citing elevated global trade uncertainty and slower-than-expected benefits from fiscal stimulus measures.

France's CAC 40 added 0.06% to 8,071.36, while the UK's FTSE 100 climbed 0.22% to 10,171.76.

Russ Mould, investment director at AJ Bell, said the FTSE 100 "got off to a strong start as gold moved through $5,500 and oil ticked up amid mounting tensions between the US and Iran," adding that "the mining sector did much of the heavy lifting for the index," while BP and Shell were also supported by firmer crude prices.

London stocks were buoyed by strong gains in mining shares as gold surged past $5,500 an ounce early on Thursday, just three days after breaching $5,000 for the first time.

The metal had risen by almost a third this month alone, while silver jumped to $120 an ounce for the first time, taking year-to-date gains to around 65%.

Investors continued to de-risk portfolios amid rising geopolitical and economic uncertainty, with a weaker dollar - after US president Donald Trump said he was comfortable with its decline - further supporting bullion.

Patrick Munnelly, market strategy partner at TickMill, said that "as the US dollar weakens and geopolitical tensions rise, investors are gravitating towards tangible assets for protection, driving the commodities market to new highs," noting that gold was trading near with a monthly gain of around 28%.

Energy markets were also in focus after Trump said a large US naval force was heading towards Iran, stoking supply concerns.

Munnelly added that Brent crude had "reached its highest levels since September," warning that rising input costs were weighing on bond markets as investors assessed inflation risks just as central banks sought to ease policy.

Riksbank keeps interest rates on hold as expected

In economic news, Sweden's Riksbank left interest rates unchanged at 1.75%, as expected, and signalled they were likely to remain at that level for some time.

The central bank warned that uncertainty around inflation and growth had increased, with Swedbank noting that US trade and foreign-policy developments had widened the range of potential outcomes, even as the Swedish economy had so far proved resilient.

Miners rise alongside gold price, SAP in the red

In equities, miners including Glencore, Antofagasta, Rio Tinto and Anglo American advanced on the back of higher gold prices, although Fresnillo reversed gains to close just below the waterline.

Mould said precious-metals strength was supporting sector shares, alongside a positive production update from Glencore.

Elsewhere, shares in private-equity group 3i jumped after it reported a further rise in net asset value over the nine months to December.

Swiss engineer ABB climbed after issuing an upbeat outlook and announcing a $2bn share buyback, while French spirits maker Remy Cointreau gained after confirming a return to sales growth in the third quarter, helped by robust US demand.

In banking, Deutsche Bank ended lower after fourth-quarter profits beat expectations, with net profit attributable to shareholders of �1.3bn versus forecasts of �1.12bn, a day after authorities raided its offices as part of a money-laundering probe.

ING Groep was also in the red despite beating profit estimates, while Swedbank slipped and SEB slid after missing fourth-quarter profit targets.

Elsewhere on the downside, German software group SAP fell sharply on concerns over the outlook for cloud-booking growth.

Reporting by Josh White for Sharecast.com.