UPDATE 2-European shares rise as earnings growth expectations stabilise

  • Reuters
  • Stock Market News
UPDATE 2-European shares rise as earnings growth expectations stabilise
Credit: © Reuters.

* Q4 earnings seen rising 3 pct

* IBEX lags after govt loses budget vote

* ABN drops on poor update, Ingenico up

* Osram confirms takeover talks, shares rally (Adds details, updates prices)

By Julien Ponthus and Danilo Masoni

LONDON, Feb 13 (Reuters) - European shares rose on Wednesday as optimism about trade talks lifted global markets and data showed earnings growth forecasts for Europe were stabilising after steep downward revisions.

The pan-European STOXX 600 .STOXX index was up 0.6 percent, rising for the third straight session, with Germany's trade-sensitive DAX .GDAXI up 0.4 percent.

Wall Street also extended its rally as hopes grew that the U.S. and China would hammer out a trade deal and avert a new round of U.S. tariffs on imports from China set to kick in next month.

"The situation on US-China trade remains fluid, but our Asia strategy team's base case is that there will be a deal," Nomura analysts said in a strategy note.

Madrid's IBEX .IBEX lagged, ending flat, after Spain's parliament rejected a draft 2019 budget, pushing the country close to an early national election amid an increasingly fragmented political landscape. more volatile, smaller Lisbon market .PSI20 was dragged lower by the political uncertainty in Madrid, ending down 1.2 percent. the labyrinthine twists and turns of Brexit, London's FTSE .FTSE outperformed, up 0.8 percent to a 4-month high, as data showed British inflation fell to a two-year low in January.

"They came in lower than expected and pretty much have taken off any pressure the BOE might have had in regard to prices going up too fast," said City of London Markets trader Markus Huber.

"Furthermore it could give the BOE more room to lower rates should the economy slide into a recession either due to prevailing Brexit uncertainty or a Brexit no deal," he added.

A fresh batch of corporate earnings triggered strong price moves both upwards and downwards.

Dutch bank ABN Amro ABNd.AS , hit by loan impairments, fell 7.7 percent with fourth-quarter net profit way below analysts' expectations. blue chip peer Heineken HEIN.AS had a totally different welcome from the market, rising 6 percent on better-than-expected results.

Still in the Netherlands, paint maker Akzo Nobel AKZO.AS jumped 3.3 percent after marginally beating expectations. AMUN.PA , the euro zone's largest asset manager, was also cheered by investors, rising 4.4 percent, after confirming its profit targets for 2020 despite adverse market conditions in the fourth quarter. other companies whose results stood out was Ingenico INGC.PA , up 10.5 percent to the top of the STOXX 600, online gambling firm Kindred Group KINDsdb.ST , up 7.5 percent and Swedish Match SWMA.ST which rose 9.2 percent.

These positive results come in as earnings forecasts for STOXX 600 companies are stabilizing after experiencing a free fall since last November, I/B/E/S Refinitiv data shows.

Earnings for the last quarter of 2018 are now expected to rise 3 percent year-on-year, a more optimistic outlook than the 2.3 percent forecast of last week.

German lighting company Osram OSRn.DE soared 14.3 percent after it confirmed that it was in takeover talks with Bain Capital BCSF.N and Carlyle Group CG.O , which are considering a joint bid for up to 100 percent of the group. gfh

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