4 Min Read
LONDON/MILAN (Reuters) - European shares ended at their highest level in two weeks on Thursday, with some major companies such as France's second-biggest listed bank Societe Generale and oil major Total advancing after their results.
Eutelsat (ETL.PA) also surged, up 8.2 percent to lead gainers on the STOXX 600 index, after the telecommunication services firm's first-half revenue fell less than expected. It also forecast higher Internet and mobile satellite sales and planned to buy a Viasat (VSAT.O) satellite.
Shares in Societe Generale (SOGN.PA) rose 2.3 percent after the French bank reported better than anticipated net income in the final three months of last year and said it would float a stake in its booming vehicle leasing unit ALD.
France's Total (TOTF.PA) gained 1.3 percent after the company also reported better than expected fourth quarter net profits, thanks to cost savings that enabled it to raise its dividend. Total said it was hunting for opportunities to buy assets from struggling rivals.
Bank of America Merrill Lynch said there was a strong value case for European equities relative to the United States. However, the value case was conditional on the earnings cycle in Europe turning to relative profit growth and the impact of political and sovereign risks.
"So far the signs are positive. Earnings (in Europe) are now rising relative to the U.S. and we expect double digit EPS growth in 2017," Bank of America ML analysts said in a note.
The pan-European STOXX 600 index climbed 0.8 percent to its highest level since Jan. 27 after rising in the past two straight days.
Across Europe, DAX .GDAXI rose 0.9 percent. DZ Bank Chief Investment Strategist Christian Kahler said he expected the German blue chip index to climb another 8 percent to a record high by the end of the year, saying solid earnings and economic growth should help offset political risks.
The European mining index .SXPP ended up 0.1 percent, underperforming the broader market, after copper and nickel dropped.
Commerzbank (CBKG.DE) fell 1.8 percent after the German lender said it expected net profit to remain low this year. Germany's second-largest lender behind Deutsche Bank (DBKGn.DE), however, beat quarterly profit forecasts.
Thomas Cook (TCG.L) fell 7 percent on its cautious outlook. It said summer bookings were ahead of 2016, but it was cautious for the rest of the year due to uncertain political and economic outlook. However, some analysts were mildly positive.
"Times are tough in the European travel industry and Thomas Cook isn't having the best of it, though the good news is (that) things don't seem to be getting any worse," Laith Khalaf, senior analyst at Hargreaves Lansdown, said.
Reporting by Danilo Masoni; editing by Mark Heinrich