European stocks close higher amid earnings; ECB takes center stage

  • The pan-European Stoxx 600 closed provisionally up 0.9 percent, with most sectors and major bourses in positive territory.
  • The European Central Bank left interest rates unchanged, amid signs of an apparent softening in the euro zone's growth outlook.

European stocks closed higher on Thursday, as investors monitored a fresh batch of corporate earnings.

The pan-European Stoxx 600 closed provisionally up 0.9 percent, with most sectors and major bourses in positive territory.

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Europe's autos stocks were among the top performers, up more than 0.7 percent amid earnings news. Germany's Volkswagen reported weaker-than-anticipated profits in the first three months of 2018. However, an impressive rise in vehicle sales over the same period pushed shares more than 2.6 percent higher.

Tech stocks pared losses from earlier in the session, with the sector up 0.8 percent later in the day. BE Semiconductor, which sells equipment to chip makers, was the worst sectoral performer. Despite the Dutch company's stronger-than-anticipated earnings, investor sentiment appeared to be impacted by sales warnings from two major Apple suppliers earlier in the week. Shares of BE Semiconductor tanked almost 17 percent.

Looking at individual stocks, oil refiner Neste surged to the top of the European benchmark, after it reported upbeat first-quarter figures. Shares of the Finnish firm were almost 17 percent higher on the news.

Shares in Norwegian Air were also trading sharply higher after the airline told CNBC that "several parties" are showing interest in the company. This came after British Airways and Iberia parent, IAG, bought a 4.6 percent stake in the company. Earlier this morning, the budget carrier reported a larger than expected first-quarter loss.

Philips Lighting slumped towards the bottom of the index after it reported a big first-quarter earnings miss. The world's largest light-maker came in below expectations on all key metrics, Morgan Stanley said. Its shares were over 13 percent lower.

European Central Bank

While earnings season is keeping investors busy across markets worldwide, another topic that's been taking up space in investors' minds is that of rising yields. On Tuesday, the U.S. 10-year treasury yield topped 3 percent and continued to extend gains on Wednesday.

Investors around the world have been fixated on the 10-year note yield as of late, with concerns looming that hitting the 3 percent barrier could trigger a reaction from financial markets both in the U.S. and internationally.

While breaking the psychological barrier did initially trigger a negative reaction from markets on Wednesday, indexes have since shown signs of bouncing back.

On Wall Street, stocks rose amid a strong batch of quarterly results from the likes of Facebook, AMD and Chipotle.

The European Central Bank announced its monetary policy decision on Thursday. The bank left interest rates unchanged, amid signs of an apparent softening in the euro zone's growth outlook.

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In the latest surrounding politics, French President Emmanuel Macron called upon the U.S. to engage more with the rest of the world and to combat nationalism. The European leader also went onto say that, while not perfect, the Iran nuclear deal must remain intact until a replacement is established; Reuters reported.

Now attention will turn to Germany, as Chancellor Angela Merkel is set to head to the States this week.