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European Stocks Higher; Thales Raises Full-Year Forecast

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By Peter Nurse

Investing.com - European stock markets traded higher Friday, helped by a supportive tone from the European Central Bank and more positive quarterly corporate earnings.

At 4:10 AM ET (0810 GMT), the DAX in Germany traded 0.6% higher, the CAC 40 in France rose 0.7% and the U.K.’s FTSE 100 climbed 0.7%.

The ECB kept its very accommodative monetary policy in place on Thursday, maintaining its benchmark interest rate at 0% as well as its 1.85 trillion euro asset-purchase scheme, while also tying its new forward guidance on interest rates more closely to inflation, suggesting they aren't likely to rise anytime soon.

This update suggests the ECB is now one of the more dovish members of the central bank club, likely supporting the recovery the stock market has made from Monday’s rout.

Also helping has been the generally strong quarterly corporate updates in the early stages of this earnings season, and Friday was no exception.

Thales (PA:TCFP) stock reached a new 52-week high after the French defense electronics company, Europe’s largest, raised its full-year revenue target after posting an almost 10% gain in first-half revenues

Skanska stock soared over 6% after the Swedish builder reported a hefty jump in second-quarter profit as building activity rebounded, while Lonza (SIX:LONN) stock rose 2.8% after the Swiss chemicals company lifted its 2021 outlook on Friday after sales for the first half of the year came in ahead of expectations.

Vodafone (NASDAQ:VOD) stock rose 2.3% after the U.K. telecoms giant reported a better-than-expected 3.3% rise in first-quarter service revenue on Friday, with Europe returning to growth.

On the flip side, Signify (AS:LIGHT) stock fell almost 6% after the world's largest lighting maker bemoaned supply chain issues while reporting a 32% jump in second-quarter core profit.

Turning to economic data, the German flash composite PMI rose to 62.5 in July from 60.1 in June, hitting its highest level in nearly a quarter of a century, helped by an easing of virus containment measures in Europe's largest economy. The news was less impressive in France, with its composite PMI falling to 56.8 points in July from 57.4 in June, its lowest figure in three months.

U.K. retail sales rose 0.5% on the month in July, a welcome improvement after the previous month’s 1.4% slump, climbing 9.7% on the year.

Elsewhere, oil prices edged lower Thursday, stabilizing after a volatile trading week. The crude market has posted gains of around 8% over the last three days, largely recouping Monday’s slump, when sentiment was hit by worries over rising Covid cases and an agreement between top producers to add supply.

At 4:10 AM ET, U.S. crude futures traded 0.3% lower at $71.67 a barrel, while the Brent contract fell 0.3% to $73.56.

Additionally, gold futures rose 0.2% to $1,808.85/oz, while EUR/USD traded 0.1% higher at 1.1783.

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