European Stocks End Higher on Ifo, Earnings
European shares closed higher across the board Tuesday after German business sentiment grew at a faster rate than expected in February and corporate earnings from the likes of Standard Chartered, Ferrovial and Persimmon were largely positive.
Stocks were choppy mid-session following news U.S. inflation soared in January while consumer confidence dropped in February, both reducing investors’ expectations U.S. interest rates would be slashed further.
The closely watched Ifo economic research institute survey beat estimates from analysts polled by Reuters, which gave investors hope that Europe's largest economy was coping with the slowdown in the U.S.
Meanwhile, Standard Chartered posted forecast beating results for 2007 due to exposure to Hong Kong and Indian markets, sending its shares higher by 7.9 percent and boosting the banking sector generally.
Also in the UK, house builder Persimmon reported a 1 percent rise in full-year profit, above analysts' forecasts, but said it remained cautious on the year ahead, as prospective buyers were taking a while to buy homes. Shares ended lower by 0.4 percent.
In Spain, Ferrovial's core earnings rose 31 percent, thanks to the acquisition of UK airport operator BAA. But the debt taken on to finance the deal weighed on the company's net profit.
France's Suez beat expectations with a 12.4 percent rise in full-year operating profit. The utility company confirmed the timetable for its merger with Gaz de France. Suez shares were 1.2 percent higher.
French President Nicolas Sarkozy criticized Societe Generale chairman Daniel Bouton, telling Le Parisien that Bouton must assume his responsibilities for the bank's trading scandal.
And in Germany, Siemens' shares were up 2.5 percent after the company released its restructuring plans, which include a number of job cuts at various units.
In economic news, growth in Germany's economy slowed by more than half in the final three months of 2007, as rising food and energy prices cut into consumer spending.