European Stocks Advance With Earnings as U.K. Banks Jump on BOE
(Bloomberg) -- European shares rose as investors assessed earnings reports, while U.K. banking stocks climbed after the Bank of England said the economy is poised for a rapid recovery amid a vaccination push.
The Stoxx Europe 600 Index was up 0.6% by the close in London, with gains in financial shares offsetting declines in heavyweights such as Unilever Plc and Royal Dutch Shell Plc after their results disappointed investors. Bayer AG also climbed after it announced a plan to resolve future lawsuits.
U.K. domestic lenders such as Lloyds Banking Group Plc and Natwest Group Plc advanced after the Bank of England forecast growth in 2021 of 5%, a partial recovery from a slump of twice that magnitude last year. This is seen as reducing the threat to interest income from potential further rate cuts, even though the central bank told lenders to be ready for them.
European stocks are poised for their best weekly advance since mid-November as retail trading speculation eases, with investors looking to corporate profits for signs of the strength of the economic recovery and any roadblocks ahead.
“Overall, earnings are better than expected, with positive guidance for the year, but investors are taking advantage of picks to sell, so we are not seeing sustained advances,” said Ricardo Gil, head of asset allocation at Trea Asset Management in Madrid.
Among other prominent movers today, Valmet Oyj jumped after fourth-quarter net sales beat estimates. Finecobank Banca Fineco SpA rose after January net inflows surged.
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