European stock exchanges posted solid gains yesterday, driven by encouraging corporate earnings on both sides of the Atlantic and a forecast for stronger-than-expected growth in eurozone powerhouse Germany.
In London the FTSE 100 index rose 0.50 per cent to close at 5,757.86 points, while in Paris the CAC 40 added 1.31 per cent to reach 3,878.27 points. In Frankfurt the DAX gained 1.33 per cent and finished at 6,611.01 points.
Elsewhere Milan rose 0.89 per cent, Amsterdam 0.65 per cent and the Swiss Market Index by 0.54 per cent.
European investors welcomed upbeat earnings reports, notably from French industrial group Alstom, which jumped 4.71 per cent on news it had won two contracts in Singapore for €580 million.
In the food and beverage sector Pernod gained 6.32 per cent and Danone 4.80 per cent.
Europe’s leading automaker Volkswagen surged 3.58 per cent on news reports it could reach its target of sales 10 million vehicles in 2015, three years ahead of schedule.
Elsewhere the world’s top mobile phone maker Nokia announced stellar results and said it would shed 1,800 jobs.
Nokia’s return to profit, posting an unexpected €529 million ($741 million), far outstripped the expectations of analysts polled by Dow Jones Newswires, who on average predicted a net profit of less than €300 million.
Italian industrial giant Fiat meanwhile reported a surge in profits for the third quarter, €190 million ($264.1 million) from €25 million at the same time last year.
European sentiment was also strengthened by a prediction from the German economy minister that Germany could expect growth of 3.4 per cent this year, rather than 1.4 per cent as projected in April.
The expansion is expected to continue next year, albeit at a slower pace, 1.8 per cent.
“Germany is again the growth engine of Europe. After a period in the fast lane, our economy is now in the overtaking lane,” Economy Minister Rainer Bruederle said.
And he added that after a strong impulse from exports, domestic demand would contribute much more to growth next year. “The recovery is standing solidly on two legs,” said the minister.
“I assume that we will have growth of around two per cent for the next five years or so,” he predicted.
US stock markets started the day in postive territory as a dip in jobless claims and strong earnings boosted investor spirits.
The blue-chip Dow Jones Industrial Average was up 0.75 per cent at 11,191.52 at mid-day, when the Nasdaq composite had risen 0.80 per cent to 2,477.17.
Before the opening bell, the Labor Department reported new claims for US unemployment benefits fell last week, although not enough to offset a sharp rise the prior week amid a weak recovery from recession.
“The only data out this morning – initial weekly jobless claims – were on par with expectations. Earnings continue to exceed expectations,” said analysts at Briefing.com.
In company news, fast-food giant McDonald’s reported net profit jumped 10 per cent in the third quarter, to $1.4 billion, on robust sales worldwide. Its shares were up 2.5 per cent.
United Continental Holdings, the world’s largest airline, disclosed that quarterly profits rose for each of the recently merged carriers, United and Continental, as travel demand picked up.
United, which merged in an all-stock deal with Continental on October 1, had net profit of $473 million in the third quarter, or earnings per share of 2.12 dollars, the holding company said.
Continental reported third-quarter net profit of $367 million, or $2.24 earnings per share.
Asian shares closed mixed yesterday as Chinese data showed inflation in the world’s second-biggest economy jumped to its fastest rate in almost two years but growth had eased.
Analysts said the figures indicated the economy was levelling off after blistering growth earlier in the year.