* FTSEurofirst 300 ends 0.5 pct higher after early losses
* Sentiment improves after results from major U.S. firms
* Cyclical shares lead the bounce, autos gain the most
By Atul Prakash
LONDON, April 17 European equities finished
higher on Thursday after losing ground earlier in the session,
with upbeat results from major U.S. companies like Morgan
Stanley, Goldman Sachs and General Electric improving sentiment.
Morgan Stanley reported a 55 percent jump in
first-quarter earnings, General Electric posted a 12
percent rise in overall industrial profits and both earnings and
revenue of Goldman Sachs beat market estimates.
"When we look at the U.S. results coming out today, there
was a predominantly positive beat overall," said Gerhard
Schwarz, head of equity strategy at Baader Bank.
"The results certainly may come in quite well over the next
couple of weeks because companies have done a lot guiding lower
over the last weeks and this is probably a good basis for
Encouraging U.S. results helped cyclical sectors to gather
pace, with the STOXX Europe Automobile and Auto Parts index
rising 2.1 percent to become the top performing sector.
The travel and leisure index rose 1.7 percent, while
insurers were up 1.2 percent.
The market was also supported by data showing a
less-than-expected rise in U.S. unemployment benefits. New
applications for unemployment benefits held near their
pre-recession levels last week, offering further evidence of the
economy's underlying strength.
A rally in cylical stocks following soothing U.S. company
results helped the FTSEurofirst 300 of top European
shares to close 0.5 percent higher at 1,328.71 points.
"We forecast that over half of the U.S. companies that are
reporting over the current results period will beat analysts'
estimates and that looks like it is happening, as this week's
results show," said Lorne Baring, managing director of B Capital
Wealth Management in Geneva.
"We are advising investors to hold the line and stay
invested in equities as there's upside on both sides of the
Atlantic from current levels."
However, investors remained wary of placing strong bets
before a four-day Easter weekend in Europe and as some European
companies reported earnings that were knocked by currency
effects. The FTSEurofirst 300 index fell to a low of 1,317.62
earlier in the session before recovering.
Dutch firm AkzoNobel fell 5.8 percent after
lower-than-expected earnings, which it blamed on adverse
currency movements, while Germany's SAP was down 1.2
percent after warning the damage from volatile exchange rates
could worsen in the second quarter.
Gains in the broader market were capped by a decline in food
and beverages stocks. The sector index dropped 0.5
percent, led lower by a 3.7 percent fall reported by Diageo
after reporting a decline in third-quarter organic net
The sector index also came under pressure from a 3.3 percent
fall in Remy Cointreau after warning its full-year
operating profit would plunge as much as 40 percent.
"Remy and Diageo have been hit by their performance
especially in China, and that's having a knock-on effect onto
other companies that have also in the past posted weak emerging
market figures, such as Unilever," said Manoj Ladwa, head of
trading at TJM Partners.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today's European research round-up
(Additional reporting by Alistair Smout; editing by Andrew