Timid recovery for European shares as earnings dominate, Deutsche Bank disappoints

LONDON (Reuters) – Encouraging results and a recovery among industrials helped European stock markets on Thursday, while earnings disappointments weighed heavily on some stocks including Germany’s Deutsche Bank.

A statue is pictured next to the logo of Germany’s Deutsche Bank in Frankfurt, Germany, September 30, 2016. REUTERS/Kai Pfaffenbach

The STOXX 600 inched up 0.2 percent in early deals, enjoying a timid bounce from the one-week lows hit in the previous session when anxiety over rising bond yields jolted risky assets.

Bank earnings were also a key focus.

Deutsche Bank (DBKGn.DE) fell 2.6 percent after the bank said it would scale back its bond and equities trading in a major overhaul of its investment bank, after reporting a 79 percent drop in net profit in the first quarter.

The stock is down more than 27 percent year-to-date, the worst-performing of the European banks sector .SX7P.

Norway’s largest bank, DNB (DNB.OL), jumped 6.2 percent meanwhile after profit beat expectations as a pick-up in activity in the oil sector wiped the bank clean of loan losses.

Among notable gainers, Finnish oil refining firm Neste (NESTE.HE) topped the STOXX, jumping 11.5 percent after reporting first-quarter sales comfortable topped analysts’ estimates.

Oil majors moved in opposite directions after results.

France’s Total (TOTF.PA) gained 0.8 percent after it reported record production lifted profits, while Royal Dutch Shell (RDSa.L) declined 1.8 percent despite reporting a 42 percent rise in first-quarter profit.

German forklift maker Kion blamed a slowing in the market for weaker than expected first-quarter order intake. Its shares tumbled 8 percent.

Shares in Philips Lighting (LIGHT.AS), the world’s largest lighting maker, fell 8.4 percent after the firm reported lower than expected first-quarter earnings due to falling sales and margins, especially in its U.S. market.

BE Semiconductor Industries (BESI.AS) sank 9 percent to the bottom of the STOXX 600 after its results. Semiconductors across Europe have been under pressure recently as sentiment on the tech sector turns more pessimistic.

Reporting by Helen Reid; Editing by Matthew Mpoke Bigg

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