May 4, 2018 / 7:33 AM / 5 months ago

European stocks rebound; bank shares lag after poor HSBC, BNP results

MILAN (Reuters) - European shares bounced back on Friday as good company results rolled in, but bank stocks were left behind after poor updates from HSBC (HSBA.L), BNP Paribas (BNPP.PA) and Societe Generale (SOGN.PA).

Broad-based gains lifted the pan-European STOXX 600 index, which rose 0.6 percent. The banking index, recently penalised by softer economic data and cooling expectations about monetary policy tightening, was among the worst-performing sectors, rising 0.2 percent.

The recent fall in the euro has helped Europe outperform Wall Street in recent weeks, with the euro zone index .STOXXE posting its sixth straight week of gains.

“The euro has remained under pressure this week on declining expectations about the timeline of an expected tapering of the ECB’s bond buying program. Yesterday the latest EU inflation numbers saw an unexpected decline in inflation on both the headline rate as well as on core prices,” said Michael Hewson, analyst at CMC Markets, in a note.

FILE PHOTO: Traders prepare before the opening of the German stock exchange in front of the empty DAX board, at the stock exchange in Frankfurt, Germany, June 24, 2016. REUTERS/Staff/Remote/File Photo

On Friday, solid updates lifted shares in German chemicals firm Lanxess (LXSG.DE), British Airways owner IAG (ICAG.L) and Swiss drug ingredients maker Lonza (LONN.S) to the top of the STOXX.

Sports car maker Ferrari (RACE.MI) rose 7.7 percent to a record, as brokers welcomed its better-than-expected quarterly update.

HSBC declined 1 percent after it reported an unexpected 4 percent drop in first-quarter pre-tax profit, although its new chief executive sought to cheer investors with a share buyback of up to $2 billion.

BNP Paribas fell 1.2 percent and Societe Generale lost 5.2 percent after a weak-looking set of first-quarter results from the French banks.

Foreign exchange was blamed by BMW (BMWG.DE) for a 3 percent drop in quarterly operating profit. Shares in the German luxury carmaker were down 0.7 percent.

Air France (AIRF.PA) dropped nearly 3 percent after the airline said it expected profits to fall this year because of strikes at its main French unit.

Reporting by Danilo Masoni and Kit Rees

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