European Stocks End Higher as Investors Await Bernanke
European stocks managed to close in the green Thursday after oscillating between the joy of some good corporate results on the continent and worries over credit markets woes.
Investors in Europe kept one eye on U.S. stocks, which traded mixed on continuing fears that the subprime crisis may deepen, moving with caution before a speech by the Federal Reserve Chairman Ben Bernanke expected on Friday. Asian markets, with the exception of Singapore, ended higher.
The London FTSE-100 , Paris CAC-40 and Frankfurt DAX were higher, as was the FTSE CNBC Global 300 and most other European indexes, boosted by companies posting good earnings.
The world's biggest alcoholic drinks group, Diageo, matched forecasts with a 13% rise in annual earnings and raised its target for future profit growth. Its shares closed nearly 3% up.
French supermarket group Carrefour said first-half recurring net profit edged up 0.1% to 741 million euros, beating market forecasts, and reaffirmed its targets, but its shares closed nearly flat at 52 euros.
Credit Agricole's shares jumped 3% on news that the French bank's second-quarter net profit rose 0.6%, beating analysts estimates, and after it said its exposure to the U.S. subprime loan crisis was limited.
Banks Still Jittery
Despite good news coming from French banks, the financial sector elsewhere in Europe was still jittery as news emerged that the Bank of England extended a 1.6 billion pounds ($3.2 billion) emergency loan to a financial institution it did not want to name.
In Germany, shares of Hypo Real Estate, Deutsche Postbank and Deutsche Bank closed down, with investors still not seeing the end of bad news on German banks' exposure to risky debt.
Analysts said that trading on Friday was likely to be cautious ahead of Bernanke's speech, but some observers say that a rate cut may not be the right medicine for the markets.
Mark Ostwald, Fixed Income Analyst at Insinger De Beaufort, told "European Closing Bell" that he expected Bernanke to say that the current crisis was created by an excess of liquidity and bad investment.
"What will keep markets going is people sticking their hands up and admitting the problems they had," he said. "We need to establish who has lost what and have a market again."