Europe Markets

Europe ends mixed as oil ticks up; investors digest earnings, Fed, BOJ news


European stocks finished mixed on Thursday as markets eyed the rebound in oil prices, after digesting earnings and the latest central bank decisions from the Federal Reserve and the Bank of Japan.

Central banks in focus

The pan-European STOXX 600 reversed earlier sharp losses, to close 0.2 percent higher provisionally. Sectors however pointed in different directions by the close.

London's FTSE 100 ended slightly above the flat line while France's CAC fell just below the flat line at the end of Europe's session. Germany's DAX however popped 0.2 percent.

On Thursday, global markets were digesting the latest decision and comments from the Fed after the central bank decided to opt for caution and hold rates steady amid an apparent slowdown in the U.S. economy. The central bank left the door open for a hike in June, however.

"Economic activity appears to have slowed," the Federal Open Market Committee said in a statement released after its two-day meeting this week. "Growth in household spending has moderated, although households' real income has risen at a solid rate and consumer sentiment remains high."

The statement reiterated the official stance that inflation will rise toward 2 percent—the central bank's target—"over the medium term" but is being held back by "the transitory effects of declines in energy and import prices." On the data front, U.S. gross domestic product (GDP) rose 0.5 percent in the first quarter on an annualized basis.

Meanwhile, the Bank of Japan's (BOJ) decision to keep monetary policy steady caused hefty swings in Japanese markets Thursday, with the yen rallying sharply and stocks tumbling to close lower. The BOJ's move surprised many market players who were widely expecting more stimulus measures from it. The move by the BOJ added slight pressure to U.S., stocks on Thursday, which were mixed to slightly higher around Europe's close.

Crude picks up

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Elsewhere, crude futures saw a pick up in late Thursday trade, supported by a weaker U.S. dollar. Brent last stood some 0.8 percent up, at $47.58, while U.S. WTI hovered around $45.54.

Tullow Oil announced it had trimmed its annual capital expenditure plans by $100 million, and revealed that lenders had agreed to a loan facility extension, Reuters reported. Shares jumped 12 percent to the top of benchmarks.

Meanwhile, Europe's best sector performer was basic resources, closing up over 3 percent, as metal prices posted solid gains. The sector was also helped by miner Anglo American, who agreed to sell its niobium and phosphates business to China Molybdenum for $1.5 billion in cash. Shares jumped 8 percent.

Deutsche Bank jumps 4%; Spainish banks slip

Earnings were once again in focus with a number of banks reporting. Germany's Deutsche Bank posted a 58 percent drop in net profit in the first quarter, to 236 million euros ($267 million) compared to the same period last year. Still, the stock finished trade up some 4 percent because of the surprise net profit. The market was expecting a net loss.

Spanish bank BBVA slumped almost 7 percent after it reported a 54 percent year-on-year decline in first-quarter net profit which fell to 709 million euros ($802.8 million). Rival Caixabank slipped 3 percent after it said net profit fell 27 percent in the first quarter to 273 million euros.

Other key earnings include France's Airbus which reported a 50 percent fall in first-quarter net profit as it warned it's "facing a serious challenge for production and customer deliveries" for one of its military aircraft. Still, Airbus maintained its 2016 guidance but the warning sent shares to close down over 4.5 percent.

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French luxury goods maker Hermes said revenues rose 6.1 percent to 1.19 billion euros in the first quarter of 2016, sending shares over 3 percent up.

Swedish home appliance maker Electrolux was one of Europe's top performers after operating income rose 146 percent. Shares jumped 9.3 percent.

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