Markets: News  

Europe stocks buoyed by China data, earnings

MADRID (MarketWatch) -- Europe's benchmark stock index eked out a fifth consecutive day of gains on Thursday, finding support from Chinese economic data and well-received results from heavyweights Novo Nordisk AS and Nestlé SA.

The Stoxx Europe 600 index (SXXP) rose 0.4% to close at 270.26 after posting a 0.2% gain on Wednesday.

The drug and diversified food sectors led the way to gains, while telecoms pushed on the downside.

Doing some heavy lifting for the Stoxx 600, Novo Nordisk (NVO) (NOVOB) shares rose 1.3% after the insulin maker lifted its full-year earnings and sales guidance and posted a 29% rise in second-quarter net profit. Read: Novo Nordisk lifts guidance as results beat views.

Fellow heavyweight Nestlé SA (NSRGY) (NESN) also helped out, rising 2.3% after the food and nutrition group maintained its outlook for the year and reported a stronger-than-forecast 8.9% rise in first-half net profit. But Nestlé also warned of a slowdown in the U.S. market. See: Nestlé warns of U.S. slowdown, earnings beat views.

The results provided momentum for a market awash in trader vacations and low volume. Novo Nordisk and Nestlé also represented blips on the landscape of a largely unimpressive second-quarter earnings season in Europe.

"The performance here is that Nestlé slightly accelerated its volume growth in the second quarter, a unique result in the sector," said analysts at Vontobel Research in a note, who added that the food major also reported growth in troubled European countries, including Spain, Portugal, Italy and Greece.

Also providing some support, China data showed an easing in price pressures as well as slowing industrial production and retail sales, which analysts said opened the door for Beijing to further loosen monetary policy. Read: China data point to slowdown, need for easing.

"It's good if China eases because then, most likely, growth prospects will go higher for China and subsequently for the world and risk will be on, because if China eases, demand goes higher and commodities demand goes higher," said Christian Tegllund Blaabjerg, chief economist at FIH Erhvervsbank.

"Once China steps on the pedal, markets across the world will say 'This is good for the world.' We need China to drag the world out of its misery," Blaabjerg said. But he doesn't expect that to happen until September, along with expected policy easing from the U.S. Federal Reserve.

For now, he said, markets are stuck in range-trading, which is likely to carry on through the month of August.

German stocks lag

Germany's DAX 30 (DAX) ended the day down 1.16 points, or less than 0.1%, at 6,964.99.

On the downside, shares of COMMERZBANK AG(CBK) fell 4.2%. The bank warned on second-half net profit, citing pressure on its revenue and loan books from challenging market conditions. Read: Commerzbank warns as crisis weighs on sales, loans.

Heavyweight Deutsche Telekom AG(DTE) fell 2%. The telecommunications group said it's on track to reach its targets for the full year after a sharp rise in second-quarter net profit, but also warned that business in Europe is unlikely to see any near-term improvement. Read: Deutsche Telekom confirms outlook as earnings rise.

The French CAC 40 index (PX1) rose 0.5% to 3,456.71. Utility GDF Suez SA(GSZ) weighed with a 1.4% drop, followed by a 1% fall for Electricite de France SA(EDF) . Belgium's atomic power regulator on Thursday temporarily shut one of its seven nuclear reactors on suspicion that one of its components could be cracked. GDF Suez operates the Belgian nuclear plants via its Electrabel unit.

In the same sector, shares of E.ON AG (EOAN) slipped 0.4% in Frankfurt.

Shares of luxury-goods group LVMH Moët Hennessy Louis Vuitton SA (MC) rose 2.8%.

In London, the FTSE 100 index (UKX) (UKX) (UKX) gained 0.1% to end at 5,851.51, supported by a 3.6% gain for Standard Chartered PLC(STAN) .(2888) , which continued to claw back from a rout earlier in the week. Citing persons close to the situation, the Financial Times reported Thursday that the bank is considering a potential countersuit versus the New York state regulator that accused it of laundering money for Iran earlier in the week. Shares of Standard Chartered remain 13% lower since the start of the week.

Shares of Randgold Resources Ltd. (RRS) rose 1.6% after the gold producer said second-quarter earnings beat forecasts, helped by increased gold output. Randgold also said its growth projects remain on track. See Randgold earnings beat views, projects on track.

Miner Xstrata PLC(XTA) added 1.4%.