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European stocks close higher as US earnings raise confidence

Key Points
  • The pan-European STOXX 600 index closes almost 0.4% higher, with most major bourses and sectors in positive territory.
  • Zalando jumps to the top of the European benchmark, gaining nearly 11% after saying it expects to post an operating profit for the first quarter.
  • Earnings from several U.S. firms beat analyst expectations Tuesday, while German data helped mitigate concerns of a global economic downturn.

European stocks closed higher on Tuesday, as investors monitored a fresh batch of corporate earnings and supportive economic data.

European Markets: FTSE, GDAXI, FCHI, IBEX

The pan-European STOXX 600 index closed provisionally almost 0.4% higher, with most major bourses and sectors in positive territory.

Looking at individual stocks, shares of German online retailer Zalando rose to the top of the European benchmark, gaining nearly 11% after the firm said it expected to post an operating profit for the first quarter.

UniCredit also rose following a $1.3 billion settlement with U.S. authorities over alleged sanctions violations. Shares of the Italian bank were up nearly 3%.

At the other end of the scale, recruitment giant Hays tumbled toward the bottom of the index despite posting a rise in profits on Tuesday. The company said it was mindful of macroeconomic conditions. Shares of the London-listed stock were down almost 3%.

Equities also got a boost from the latest economic data. German research institute ZEW said Tuesday that its investor sentiment index for the country improved to 3.1 in April, up from -3.6 in March, and better than an expected reading of 0.8.

The data has helped mitigate concerns of a global economic downturn. Investors are now keenly awaiting Chinese gross domestic product (GDP) data due Wednesday.

Growth fears wane

Market focus is largely attuned to corporate earnings, with several U.S. firms reporting their first-quarter revenues this week after underwhelming results from Goldman Sachs and Citigroup on Monday.

On Wall Street, better-than-expected earnings from the likes of Johnson & Johnson and BlackRock helped edge the major U.S. indexes into positive territory.

U.S. industrial output stumbled in March, however, falling 0.1 percent from February. The manufacturing output component of the data fell 1.1 percent in the first quarter at an annual rate. That marked the first drop since the third quarter of 2017.