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European stocks close mixed; Daimler down by 1.1%, Trump visits France

  • Online fashion retailer ASOS reported an increase of 32 percent in sales in the first four months to June
  • German Chancellor Angela Merkel travels to France to meet with her counterpart Emmanuel Macron
  • U.S. Federal Reserve Chair Janet Yellen will testify for a second day on the institution's monetary policy

European stocks closed higher on Thursday afternoon as investors digested new earnings reports and responded to more comments from U.S. Federal Reserve Chair Janet Yellen who testified before Congress for the second day.

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The pan-European Stoxx 600 ended the day 0.32 percent higher with most sectors in positive territory. Telecoms was the best performing sector after reports that U.K. regulator Ofcom is setting up a separate unit to oversee the performance of BT's broadband. The stock ended the day up 3.9 percent. Furthermore, the French telecoms group Altice reportedly has plans to launch an online bank by early 2019 in Europe.

Retail stocks also closed higher, boosted by earnings. French retailer Casino said it is confident on its profit goals after strong sales in France. It was up 3.6 percent. Britain's Sports Direct bought a 25.75 percent stake in video games retailer Game Digital and climbed almost a percent on the news.

Autos recovered after a rocky morning. Daimler is being accused of selling more than 1 million vehicles with excess emissions. Its shares fell 1.12 percent in the day before closing down 0.47 percent.

However, the health care sector struggled in Thursday trade and ended the day down 0.7 percent. The pharmaceutical firm AstraZeneca dropped 3.4 percent after news that its Chief Executive Pascal Soriot could join an Israeli drug group. Analysts interpreted the reports as an indication that results from a lung cancer trial could fail.

Metro stock split, Asos reports 32% increase in sales

Looking at individual stocks, the German retailer Metro completed its division into two companies. Metro is now only a food retailer, whereas the consumer electronics side has been renamed Ceconomy.

Umicore, a multinational materials technology company headquartered in Brussels, received a "conviction buy" rating by ABN Ambro, which sent the stock 3.7 percent higher.

The online retailer Asos reported a 32 percent increase in sales in the first four months to June, but mainly driven by customers outside Europe and the U.S. The stock rose higher in Thursday deals but closed the day down 0.88 percent.

Finnish stainless steel maker Outokumpu slumped to the bottom of the European benchmark Thursday afternoon, down more than 8 percent, after revising down its second quarter outlook. It ultimately closed down 2.2 percent.

Fed eyed, euro falls

Markets in the U.S. were higher, buoyed by comments made by U.S. Federal Reserve Chair Janet Yellen. On Wednesday, Yellen said the central bank is likely to start reducing its massive $4.5 trillion portfolio later this year but the speech was seen as mainly dovish by many market participants. She testified to Congress for a second day Thursday morning.

In Europe, Ilmārs Rimšēvičs, governor of the Central Bank of Latvia and member of the ECB governing council, said QE could continue for another couple of years given low inflation, according to Reuters. The comments sent the euro lower against the dollar.

Meanwhile, data out on Thursday morning showed year-on-year inflation rose by 1.5 percent in Germany in May, but only 0.8 percent in France.

Still on the continent, German Chancellor Angela Merkel met with her counterpart Emmanuel Macron in Paris Thursday. According to German business newspaper Handelsblatt, finance ministers of the two major European economies will present a plan to co-ordinate the countries' corporate tax frameworks.

Meanwhile, Theresa May marked the first anniversary of her leadership as U.K. prime minister. A Brexit milestone was also be reached as Parliament published the Repeal Bill, the legislation required to remove the U.K. from the control of European Union law.

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