Europe riding high on China ride, but earnings season disappoints – Markets in a minute

Europe on the rise following China’s ride, but “earnings season” disappoints

European stock markets ended the last session of the week on a high, with the aftermath of yesterday’s ECB monetary policy meeting still buoying the market.

Furthermore, the bloc’s shares most exposed to the Chinese economy registered advances, after the Chinese central bank issued more measures to support the Asian country’s markets, at a time when data relating to the Chinese economy did not show major improvements.

Brokerage Goldman Sachs reduced its earnings growth forecast for this year for the European Stoxx 600 index from 6% to 2%, citing risks from rising corporate taxes and potential trade tariffs.

This Friday, the European benchmark, the Stoxx 600, rose 0.21% to 524.99 pointswith the technology and “basic resources” sectors recording the best performances – the first advanced 2%. In turn, retail, media and real estate held back greater gains in the main European index.

The start of the session was marked by some disappointment with the third-quarter earnings season of the block’s largest publicly traded companies, which nevertheless registered a gradual recovery throughout this weekend’s trading. Barclays analyst Emmanuel Cau explained that the tepid start to earnings season is not bad enough to derail the global stock rally.

Among the main market movements, ASML Holding NV appreciated by almost 5%, after yesterday having released more positive perspectives for annual profits than previously announced.

Volvo, for example, turned the tide and ended the day with gains of more than 3%, even though profits declined in the third quarter due to falling demand.