Strong earnings buoy European shares

Published May 15, 2014

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London - European stocks turned flat as upbeat corporate earnings from blue chips such as jeweller Richemont contrasted with mixed GDP figures.

Traders were looking to euro zone GDP and inflation figures, both due at 11:00 SA time, to gauge the odds of more monetary stimulus from the European Central Bank.

The prospect of ECB action has lifted stocks in the past week.

Insurers Aegon, clothing retailer H&M and jeweller Richemont traded from 2.4 percent to 4.7 percent higher after releasing their results.

“Results will provide support, but the focus today is on the economic data,” Mike Reuter, a broker at Tradition said.

A weaker euro zone GDP reading could be seen as creating room for fresh stimulus in June, supporting stocks, he said.

The pan-European FTSEurofirst 300 index was flat at 1,368.06 points at 10:20 SA time after reaching a fresh six-year high at 1,372.81 points earlier in the session.

Germany's Dax was also flat after hitting an all-time high at 9,810.29 points.

Over the past week, European indexes have been boosted by speculation the ECB may cut rates and announce other measures at its June meeting.

The central bank has said any move would depend on economic data, putting the euro zone GDP figures and inflation figures under scrutiny.

France's and Italy's GDP readings came in under forecasts.

But German economic growth doubled to 0.8 percent quarter on quarter, beating consensus estimates. - Reuters

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