* FTSEurofirst 300 up 0.3 pct
* ASML reiterates optimistic outlook after earnings beat
* ABB suffers after profit warning
* Intesa, Enel benefit from Barclays upgrades
By Alistair Smout
LONDON, Jan 22 European shares rose on
Wednesday, buoyed by above expectation results from Dutch
technology firm ASML that helped to raise optimism over the
nascent European earnings season.
ASML, regarded as a barometer for the health of
Europe's technology sector, surged 5 percent after it beat
forecasts for its fourth-quarter results and reiterated its
upbeat outlook for first-half sales.
While only 8 percent of STOXX Europe has reported
earnings so far, 68 percent of those that have posted results
have beaten or met expectations for yearly earnings.
"Although the proof will be in the pudding, the expectation
is for European earnings to shine, with a likelihood of more
surprises than disappointments," Darren Sinden, trader at Titan
Investment Partners, said.
However, Swiss engineer ABB fell 3.8 percent after
it flagged that its power division would miss quarterly profit
targets after $260 million in charges due to project delays and
"Whilst a $260 million hit for ABB is not that palatable in
a quarter, in the grand scheme of things its not that
material, particularly if it is just a one off restructuring
charge," Sinden said.
"Overall I would expect Industrials to do well over the
By 0828 GMT, the pan-European FTSEurofirst was up
0.3 percent at 1,349.55, just shy of a fresh multi-year high
touched during Tuesday's trade at 1,353.47.
The index is up 2.5 percent this year, having broken out of
a tight ten point range a week ago.
Supporting gains were a number of companies that benefited
from target price upgrades from banks, with Italian utility Enel
and bank Intesa San Paolo gaining 2.4 percent
and 1.7 percent respectively after both received upgrades from
Enel is upgraded to "buy" from "neutral" by the bank, which
says that negativity still surrounds the firm, which still looks
like good value despite a 9 percent gain so far this year.
"We believe this year (Enel) can change the negative
perception that the market still has in relation to the
company's generation of FCF (free cash flow) and de-leverage
prospects," analysts at Barclays said in a note.
"Despite the good run, the stock still appears cheap."
Today's European research round-up
Asset returns in 2013: