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European shares edge higher on encouraging earnings

Source : REUTERS
Last Updated: Thu, Oct 31, 2013 12:40 hrs

* FTSEurofirst 300 index gains 0.3 percent

* Autos, financial gain on encouraging earnings

* Royal Dutch Shell drops after results

By Atul Prakash

LONDON, Oct 31 (Reuters) - European shares edged higher to trade near a five-year high by midday trading on Thursday, with automobile and financial sectors advancing after some encouraging company results.

The European automobile index climbed 1.5 percent, the top sectoral gainer, led by a 5.8 percent jump in Finnish tyre maker Nokian Renkaat after it reported better-than predicted operating profit.

The market also got support from a 1.2 percent gain in the banking sector, with Spain's Banco Popular rising 6.9 percent after posting better than expected nine-month earnings thanks to trading and capital gains.

Earnings results were mixed on Thursday, with oil major Royal Dutch Shell's third quarter profits undershooting analysts' forecasts and pushing its shares 4.5 percent lower.

"The earnings that are coming through are weak but stable. The broader environment is much more supportive of equity prices," said Oliver Wallin, investment director at Octopus Investments.

"The amount of liquidity in the markets and the capacity in Europe and Japan to inject further is generally positive for the market."

At 1226 GMT, the pan-European FTSEurofirst 300 index was up 0.3 percent at 1,291.43 points after climbing to a five-year high in the previous session. However, the index remained on track to record a second straight month of gains.

However, the oil services firm Technip fell 9 percent, the top decliner on the FTSEeurofirst, after cutting its full-year sales and margin targets for its sub-sea business.

Investors brushed aside concerns that the Federal Reserve's less-dovish-than-expected statement on Wednesday could mean that the U.S. central bank might start trimming its stimulus sooner than foreseen.

The Fed kept its massive stimulus plan intact as the market widely expected, but did not sound as alarmed about the state of the economy as anticipated, removing a reference to tighter financial conditions from its announcement.




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