European stock markets closed cautiously higher Thursday, as strong corporate earnings overcame jitters around the U.S. banking sector.
European markets
The benchmark Stoxx 600 index closed 0.2% higher. The banking sector gained 1.1%, after Deutsche Bank and Barclays profits beat expectations.
Deutsche Bank shares rose as much as 3.2%, as the bank recorded its 11th straight quarterly profit. Barclays was up by 5.3%, after it said its income climbed on higher rates and gains in its consumer credit card division.
Deutsche Bank CFO James von Moltke told CNBC on Thursday that recent sector volatility — which saw its own share price plunge and credit default swaps rocket higher — was a "test" the bank had "passed with flying colors."
In Wednesday's trading session in the U.S., shares of regional bank First Republic tumbled almost 30% as investors continued to be concerned over the bank's health, extending severe losses in the previous trading session. On Monday, the bank said that deposits dropped 40% to $104.5 billion in the first quarter.
Duncan MacInnes, investment director at Ruffer, said by email that savers were still worried about the security of their deposits, and banks would be faced with choices over whether to raise deposit rates to keep customers, hitting profitability, or face outflows.
Media stocks led European sector losses, down by 1.7%, while industrials climbed 1.3%.
AstraZeneca, Unilever and Carlsberg were among the firms reading higher on their own earnings beats.
U.S. equity markets ticked higher Thursday, boosted by Meta's results. Shares leapt after the Facebook owner reported quarterly revenue that beat analysts' expectations.
Figures published in the U.S. morning showed that the country's GDP rose by 1.1% in the first quarter, coming in below a Dow Jones consensus estimate of 2%.
In Asia-Pacific, meanwhile, markets closed mixed as investors focused on the Bank of Japan's first policy meeting led by new governor Kazuo Ueda.