European Stocks Climb Amid Earnings as Fed Meeting Starts
European stocks rose for a second day as companies from Deutsche Bank AG to ABB Ltd. reported earnings and the Federal Reserve begins a two-day policy meeting. U.S. stock-index futures advanced, while and Asian shares were little changed.
Deutsche Bank climbed 2.3 percent after Europe’s largest investment bank by revenue said first-quarter profit dropped less than expected. Statoil ASA gained 4.5 percent after reporting an advance in quarterly earnings. Nokia Oyj jumped 7.1 percent after naming a new chief executive officer and forecasting that second-half networks sales will increase. ABB lost 5.9 percent after the world’s largest maker of power transformers posted quarterly profit that missed estimates.
The Stoxx Europe 600 Index gained 0.6 percent to 335.96 at 8:19 a.m. in London. The benchmark measure advanced yesterday as companies from AstraZeneca Plc to Bayer AG rose amid an increase in mergers-and-acquisitions activity, offsetting new U.S. sanctions against Russian individuals and companies. Standard & Poor’s 500 Index futures rose 0.2 percent, while the MSCI Asia Pacific Index lost 0.1 percent.
A report at 11 a.m. in Brussels may show economic confidence in the euro area increased in April to the highest level since July 2011, while final figures will probably show consumer confidence came in at minus 8.7 from minus 9.3 in March, according to economists surveyed by Bloomberg. Separate data at 9:30 a.m. London time may show the U.K. economy expanded in the first quarter at a faster pace than in the same period last year.
Fed officials are winding down the most aggressive easing in the central bank’s 100-year history, reducing asset purchases in March to a monthly pace of $55 billion from $85 billion in December, and preparing to eventually raise the federal funds rate for the first time since 2006. The central bank will probably cut bond buying to $45 billion at the meeting that starts today, according to the median of 43 economists’ estimates compiled by Bloomberg.
Deutsche Bank climbed 2.3 percent to 32.15 euros. Net income fell 34 percent to 1.08 billion euros ($1.5 billion) in the three months through March from a year earlier. That compared with the 1.01 billion-euro average of 10 analyst estimates compiled by Bloomberg. Revenue from trading fixed income, currencies and other products dropped 10 percent to 2.43 billion euros, beating the 2.12 billion-euro average of nine projections.
Nordea Bank AB (NDA) increased 2.4 percent to 92.75 Swedish kronor. The Nordic region’s largest lender said profit rose 4.7 percent in the first quarter as it cut costs and had fewer losses on its loans. Net income was 831 million euros, compared with the average analyst projection of 850 million euros.
Statoil advanced 4.5 percent to 181.50 kroner. Norway’s biggest energy company said profit rose 32 percent in the first quarter, helped by rising U.S. gas prices.
Orange SA rose 2.7 percent to 11.13 euros. France’s largest phone company halted a decline in profitability with the help of lower subsidies two years after discounter Iliad SA became the country’s fourth wireless carrier.
Nokia added 7.1 percent to 5.51 euros after forecasting second-half networks sales will grow from last year, while posting first-quarter group revenue that fell 15 percent to 2.66 billion euros, falling short of analysts’ estimates.
The company named Rajeev Suri CEO, picking the head of its networks division to chart the company’s future and revive growth after selling its mobile-phone business to Microsoft Corp. Espoo, Finland-based Nokia also said it plans to spend about 5 billion euros on dividends, share buybacks and debt reduction.
ABB dropped 5.9 percent to 21.68 Swiss francs. A weak performance in the Power Systems unit and charges related to building offshore wind and solar plants dragged on earnings. First-quarter net income fell 18 percent to $544 million. The average estimate of 12 analysts surveyed by Bloomberg was for $719 million. Sales declined 3 percent to $9.5 billion, also missing projections.
Sanofi (SAN) declined 1 percent to 76.42 euros. France’s largest drugmaker reported first-quarter profit and sales that missed analysts’ estimates because of lower vaccine revenue in emerging markets and the euro’s appreciation.
Serco Group Plc slumped 17 percent to 336.3 pence. The operator of London’s Docklands Light Railway said yesterday after the close that a “material downward revision” may be made to its outlook and it may sell shares. The U.K. company was cut to neutral from buy at Citigroup Inc., while JPMorgan Chase & Co. said Serco may lower its operating profit forecast by at least 10 percent.