Markets

European markets close mixed with earnings, data and Bank of England comments in focus

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Key Points
  • The Bank of England upgraded its 2021 growth outlook for the world's fifth-largest economy to 7.25%, slightly above analyst expectations.
  • It was another busy day for earnings in Europe, with AB InBev, Societe Generale and Volkswagen among the blue chip companies reporting.

European markets closed mixed on Thursday as investors monitored a slew of corporate earnings and comments from the Bank of England.

The pan-European Stoxx 600 ended the session down by 0.1% having earlier climbed above the flatline. Travel and leisure stocks led the losses to slide 1.7%, as sectors and major bourses struggled for direction.

The Bank of England kept its benchmark lending rate and quantitative easing program unchanged on Thursday, while noting that the U.K.'s economic recovery is accelerating. The BOE upgraded its 2021 growth outlook for the world's fifth-largest economy to 7.25%, slightly above analyst expectations.

In an interview with CNBC's Joumanna Bercetche, BOE Governor Andrew Bailey said he expects inflation to be "a bit bumpy" this year but insisted there was little reason to panic over the medium term.

On Wall Street, U.S. stocks rose as investors awaited Friday's highly anticipated jobs report. Data released on Thursday showed first-time jobless claims dipping below 500,000, signaling that the labor market is edging closer toward pre-pandemic levels.

Back in Europe, a final U.K. composite PMI (purchasing managers' index) showed business activity in April exceeding an earlier flash estimate to come in at 60.7, up from 56.4 in March. Services sector activity grew sharply to 61.0 from 56.3 in march.

Euro zone retail sales also beat expectations in March to rise by 2.7% month-on-month, exceeding forecasts from a Reuters poll of economists for a 1.5% increase.

Investors in the U.K. will also be watching local elections across the country over the next 48 hours along with a crucial Scottish Parliament election, which could raise the prospect of another referendum on Scottish independence from the U.K.

Earnings in focus

It was another busy day for corporate earnings in Europe, with AB InBev, Societe Generale, Air France-KLM, Volkswagen, ING and UniCredit among the blue chip companies reporting.

Societe Generale reported a "record" quarter for its trading division, helping it smash through analyst expectations for the first three months of 2021. It posted first-quarter net income of 814 million euros ($977 million). SocGen shares climbed 5.5%.

AB InBev also beat profit expectations to report a 14.2% rise in core earnings. The Budweiser, Corona and Stella Artois brewer also announced that CEO Carlos Brito will step down in July to be replaced by North American boss Michel Doukeris. The company's shares added 5.2%.

Meanwhile Volkswagen raised its margin target after seeing a surge in demand for higher-priced vehicles in the first quarter. Shares fell 2.6%.

Luxembourgish satellite company SES surged 9.3% to lead the Stoxx 600 after a strong earnings report which saw the company announce a 100 million euro share buyback program.

At the bottom of the European blue chip index, German online pharmacy Shop Apotheke fell 8.8% after disappointing earnings.

Telecom Italia shares fell 5.5% after an Italian media report suggested that the company's single network plan had been parked.

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