European Stocks Advance as Unilever to Nestle Celebrate Earnings

(Bloomberg) -- European equities gained before the Easter holidays as investors embraced a number of positive earnings reports, which suggested that growth isn’t slowing just yet.

The Stoxx Europe 600 Index rose 0.2 percent on the last of trading until Tuesday, with Nestle and Unilever the biggest advancers. Unilever sales beat analyst estimates, helped by strong performance in the company’s home-care business. Nestle reported the strongest start to a year since 2016.

In contrast, Kering dropped as much as 7.6 percent as the Gucci owner’s first-quarter results were seen by Citigroup as not being enough to drive earnings momentum. Novartis and AstraZeneca were also under pressure as U.S. healthcare stocks tumbled amid concerns over potential changes to the country’s health insurance policy.

All eyes are on first-quarter earnings releases as investors try to gauge the strength of the global economy. Analysts in the monthly Bloomberg survey doubt that the rally in European equities can keep going as they see the Stoxx Europe 600 Index losing 8.9 percent from Wednesday’s close to 355 points by year-end.

“A number of recent investor surveys still places pan-European stocks in a pessimistic light with regard to current allocations and/or perceived prospective return capability and what appears to be a good start to the pan-European corporate results season should be taken for what it is: a positive,” said Chris Bailey, a European strategist at Raymond James.

As for after Easter? It’s back to Brexit, the run-up to the European Parliamentary elections and more corporate reporting, Bailey said.

To contact the reporter on this story: Ksenia Galouchko in London at kgalouchko1@bloomberg.net

To contact the editors responsible for this story: Blaise Robinson at brobinson58@bloomberg.net, Paul Jarvis, Beth Mellor

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