European stock markets ended Monday at a week high after EADS's better-than-expected profits, and lifted hopes for more good surprises to come from companies such as Swiss engineering firm ABB.
But French telecoms equipment maker Alcatel fell 2.4 per cent ahead of its results yesterday, while Britain's United Utilities was another sore spot after it said it would seek to raise one billion pounds to fund further growth.
Signs of stabilisation or improvements in profits, helped by restructuring, lifted market sentiment, strategists said, while improving economic data fuelled hopes that top-line growth would slowly come back for companies in the months to come.
But the absence of a pickup in revenues, even marginal, in the second half of the year may trigger sharp market corrections, some said.
By 1600 GMT, and with only Frankfurt still officially trading, the FTSE Eurotop 300 index was up 1.3 per cent at 872 points, just one per centage point shy of a mid-June's six-month high. The DJ Euro Stoxx 50 index gained 1.7 per cent to 2,484 points.
"Earnings are generally in line or slightly better than expected in Europe, thanks to better costs-control policies, when most investors expected the weak dollar to weigh heavily on results," said Yves Maillot from Robeco Gestion in Paris.
"What markets are now expecting is improvement in business and from what they are seeing in the United States, investors think revenues will start picking up in Europe towards the end of 2003 and the beginning of 2004."
Around Europe, Britain's FTSE 100 index ended 0.4 per cent higher, France's CAC 40 was 1.8 per cent stronger and the Swiss SMI finished 1.2 per cent firmer.
Germany's DAX was 1.6 per cent ahead by 1600 GMT, as investors in Europe's largest economy cheered a third consecutive monthly rise of Germany's Ifo business climate index yesterday as a signal of a possible economic upturn.
"It shows that even in Germany, a bottom has now been called," said Robeco's Maillot.
European aerospace giant EADS ended 4.5 per cent higher after the Airbus parent company posted a smaller-than-expected drop in first-half operating profits in a results statement released by accident late on Friday, three days early.
Other climbers included ABB as investor hopes the engineering company would bring some positive news on operations and disposals when it reports second-quarter numbers yesterday boosted its shares by five per cent.
In another case of optimism ahead of results, shares in Dutch chip equipment maker ASMI jumped 8.8 per cent to close at a year high of 16.50 euros on hopes for positive surprises when it reports.
But ASMI reported a net quarterly loss of 6.2 million euros on sales of 153.1 million euros after the Amsterdam bourse closed, with the company adding that its 2003 loss would not be much better than 2002.