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European shares boosted by earnings and PMIs
August 22, 2013 / 8:12 AM / in 4 years

European shares boosted by earnings and PMIs

* FTSEurofirst 300 gains 0.8 percent

* European stocks shrug off vague Fed minutes

* Ahold leads gainers after profit beat

* Chinese and German PMI data supports market

By Alistair Smout

LONDON, Aug 22 (Reuters) - European shares gained in early trade on Thursday, boosted by decent corporate results and PMI data after the U.S. Federal Reserve provided no further guidance over the status of its stimulus programme.

Dutch retailer Ahold was the top FTSEurofirst 300 gainer, up 4.7 percent, after reporting higher-than-expected operating profit for the second quarter.

The results helped the European market to shrug off weakness in Asian stocks, which fell after the Fed’s minutes offered little clarity over the timetable for a slowdown of its stimulus programme, prompting strengthening in the dollar.

“With emerging markets getting hammered, that’s been something that’s helped keep up developed markets, because money has been leaving emerging markets,” Will Hedden, sales trader at IG said.

“If the Fed have given us nothing from these minutes, then we’ve got to assume that at the next meeting they’re going to be a bit more candid about the plan, so there’s a couple of weeks to prepare yourself and not make any rash decisions.”

The FTSEurofirst 300 was up 0.7 percent at 0800 GMT, putting a halt to three straight days of falls. The index remains 4 percent off a five-year high hit in May, when fears over stimulus reduction first hit the market.

Ahold’s results were among the last of the earnings season, one which has been a little better than last time around. According to Thomson Reuters StarMine, 90 percent of companies on the STOXX Europe 600 have reported second-quarter results, of which 46 percent have missed expectations, while the rest have met or beaten. In the previous quarter, 48 percent companies missed forecasts.

Supporting the market was the mining sector, up 0.6 percent after flash PMI data out of China pointed to a stabilising growth picture, with the manufacturing sector at a 4-month high.

Stocks bounced after German PMI also painted a stronger picture of its economy, coming in ahead of expectations and combining with the bullish data out of China to help to counteract a weaker PMI picture in France.

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