February 12, 2014 / 3:20 PM / 4 years ago

Robust bank results help European stocks keep rally alive

* FTSEurofirst 300 and Euro STOXX 50 up 1 pct

* Europe enjoying strongest earnings season since Q3 2012

* Dividend hopes spark rally in banking shares

By Blaise Robinson

PARIS, Feb 12 (Reuters) - European stocks climbed on Wednesday, extending their brisk week-long rally, with banking stocks leading the gainers after robust results and on hopes of rising dividends in the sector.

French lender Societe Generale said it would return more cash to shareholders in 2014, after posting a swing to a fourth-quarter profit, sending its shares up 6 percent to a near-three year high.

Shares in ING surged 4.8 percent after saying it will review early repayment of its final tranche of state aid, which could pave the way for the Dutch financial services group to resume dividend payments halted in 2008.

The STOXX euro zone bank index, up 1.3 percent, has surged 8.6 percent so far this year, strongly outperforming the overall market.

At 1500 GMT, the FTSEurofirst 300 index of top European shares was up 1 percent at 1,330.44 points. The index has risen 4.7 percent in the past six sessions, reversing more than two thirds of its late-January sell-off.

The euro zone’s blue-chip Euro STOXX 50 index was up 1 percent at 3,108.24 points.

Corporate results and outlooks in other sectors also helped lift the mood, with Heineken gaining 1.3 percent after the brewer said it expected a return to revenue growth in 2014 after a tough year last year.

Nearly half way into Europe’s earnings season, 59 percent of European companies have met or beaten quarter profit forecasts, their top score since the third quarter of 2012, according to Thomson Reuters StarMine data.

On absolute terms, however, data shows profits are down 3.5 percent in the quarter year-over-year.

“We’re not really worried because the results reflect last year’s situation,” Mathieu L‘Hoir, strategist at AXA Investment Managers, which has 536 billion euros ($727 billion) in assets under management, said.

“On the other hand, companies’ outlooks are more favourable, with the euro zone economy picking up and the U.S. economy accelerating, which more than compensate for the slowdown in emerging markets.”

Chinese trade data showing record January imports also lifted stocks on Wednesday and helped ease recent worries over the country’s pace of growth.

Data showed the value of China’s total exports climbed 10.6 percent in January from a year earlier, well above forecasts for a 2 percent rise, while the value of imports advanced 10 percent.

Shares in miners Rio Tinto, BHP Billiton and Anglo American rose between 1.1 and 1.4 percent.

“On the China figures, the export number is so far above consensus you have to question it,” Darren Sinden, trader at Titan Investment Partners, said.

“Oil imports number was up sharply too, which could imply increasing growth, but I think we will need to see confirmation before jumping to that conclusion.”

Europe bourses in 2014:

Asset performance in 2014:

Today’s European research round-up

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