Ankika Biswas
(Reuters) – European stocks hit a record high on Wednesday as optimism continued over strong earnings from companies such as beer maker Anheuser-Busch Inbev and Germany’s Siemens Energy, while investors also pondered the fate of a major central bank rate cut.
The pan-European index rose 0.3% from 0830 GMT to a record high after jumping more than 1% on Tuesday.
The STOXX 600 index recovered some of its lost ground from April’s slump as corporate earnings were resilient, the European Central Bank remained confident of a likely first rate cut in June and tensions in the Middle East eased somewhat.
“The ECB is in the best position among the major currencies to begin cutting rates,” said Daniela Hathorne, senior market analyst at Capital.com.
However, ECB officials noted uncertainty about monetary easing beyond June, while doubts on the other side of the Atlantic about the Federal Reserve cutting rates loom large.
“Rate cuts alone won’t solve everything, but it certainly gives investors a sense that the ECB is on top of what’s happening in the economy,” Hathorne said.
The German economic institute IW noted that in 2024 the economy will stagnate and will continue to lag behind its peers in the region. Separate data showed a lower-than-expected decline in industrial output in Europe’s largest economy in March.
On the earnings front, shares of the world’s largest beer maker Anheuser-Busch Inbev rose 4.6% after reporting better-than-consensus first-quarter results and reaffirming 2024 guidance, helping the food and beverage index rise 1.4% to become growth leader in the sector.
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Shares of Siemens Energy jumped 11% as the energy equipment maker raised its 2024 outlook following improved second-quarter results, becoming the top gainer in Germany’s benchmark index.
Shares in supermarket group Ahold Delhaize rose 3.6% after first-quarter core profits rose, while shares in German sportswear maker Puma rose 5.1% after first-quarter sales met expectations.
Italian Leonardo rose in price by 2.5% due to growth in orders and revenue in the first quarter. The broader aerospace and defense index rose 1.7%.
BMW (ETR:) shares fell 3% after its auto segment’s first-quarter EBIT margin missed consensus, sending the auto index down 1% to become the sector’s worst performer.
Of the 185 companies in the STOXX 600 index that have reported first-quarter profits to date, 61% beat forecasts, compared with the typical rate of 54%, weekly LSEG data showed on Tuesday.
Meanwhile, Sabadell shares fell 3.4% after Spanish lender BBVA (BME:) told the company it would not upgrade its all-share takeover offer.
Elsewhere, the London index also rose to a record high following the Bank of England’s policy decision on Thursday.