European stock markets ended a volatile session on Monday with small gains as optimism over upbeat earnings and deal-related news outweighed a slump in oil prices.
The Stoxx Europe 600 rose 0.2% to settle at 340.93, posting its first rise in three sessions.
The pan-European benchmark traded as low as 339.79 during Monday’s action as losses for crude-oil futures accelerated to 2.4% in the afternoon, sending the contract to $43.14 a barrel. That in turn weighed on Europe’s major oil companies, with shares of Royal Dutch Shell PLC down 2.5%, Total SA off 1.9% and Eni SpA 1.4% lower.
Earnings season: Morgan Stanley on Monday said that this week will be the busiest of the European second-quarter earnings season, with results due from 205 companies.
After having already tracked reports from 130 companies, “we’ve seen 35% of companies beat consensus estimates by 5% or more, with 28% missing, giving a net beat of 8% of companies. This is fractionally more positive than we saw in [first quarter] results, where we saw a net beat of 6% of companies,” wrote analyst Matthew Garman in a note.
Advancers: Irish air carrier Ryanair Holdings PLC was among Monday’s top performers as shares soared 6.7%. The company backed its earnings target for the year after a 4% rise in first-quarter profit.
Still, Ryanair said there are downside risks to watch during the rest of the year, including the impact of the U.K.’s Brexit vote which put the country on course to leave the European Union.
Meanwhile, British gaming company William Hill shares climbed 4.9% as a consortium made up of gaming companies 888 Holdings PLC and Rank Group PLC said they’re considering a potential takeover offer for the bookmaker.
Ericsson AB shares gained 1.5% as the Swedish telecom-equipment maker said Hans Vestberg is stepping down as chief executive, effective immediately. This month, Ericsson posted a 24% drop in second-quarter profit and announced further cost-cutting measures.
Other movers: On the downside, shares of Italy’s Banca Monte dei Paschi di Siena SpA fell 8.4% amid reports the beleaguered bank will be asked to raise more capital in the European Banking Authority’s stress test due Friday night. Italy’s finance minister said this weekend that investors are considering a rescue of Italy’s embattled banks.
Shares of LVMH Moët Hennessy Louis Vuitton SE rose 1.5% as the luxury fashion house said it plans to sell Donna Karan International Inc. to G-III Apparel Group Ltd. in a $650 million deal.
Indexes: Germany’s DAX 30 rose 0.5% to 10,198.24 and France’s CAC 40 added 0.2% to 4,388. The U.K’s FTSE 100 dropped 0.3% to 6,710.13, weighed by the index’s banks.
Italy’s FTSE MIB closed down 0.5% at 16,692.17 and Spain’s IBEX 35 lost 0.3% to 8,575.70.
The euro was buying $1.0980, compared with $1.0976 on Friday.
Data: The closely watched Ifo business sentiment survey in Germany showed a decline in the index in July, but by less than anticipated. The Ifo business climate index fell to 108.3 from 108.7 in June. Economists polled by The Wall Street Journal had expected a reading of 107.5. It was the first Ifo reading since the U.K.’s June 23 Brexit vote.
Source: MarketWatch
