Europe Stocks Hit One-Month High After LVMH, Santander Earnings

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FTSE 250 Erases Brexit Losses

European stocks broke out of their torpor after ending little changed for four straight days.

Earnings announcements from companies including LVMH Moet Hennessy Louis Vuitton SE, Telecom Italia SpA and and Banco Santander SA helped push the Stoxx Europe 600 Index up as much as 0.8 percent before it pared its gain to 0.4 percent amid a slide in oil. The moves took benchmark gauges of French, Italian and Spanish equities up more than 1 percent, the biggest increases among western-European markets.

Europe’s equities rose the most in a week after moving in a tight range in the past few days. The Stoxx 600 has been particularly volatile in intraday trading amid thin volume, mixed earnings reports, and speculation about central-bank stimulus. The Federal Reserve is forecast to keep interest rates unchanged on Wednesday, while the Bank of Japan is set to expand its stimulus program on Friday. The Fed’s decision will come after the close of European markets.

“The good earnings are driving us further,” said Michael Woischneck, who oversees about 300 million euros ($330 million) at Lampe Asset Management in Dusseldorf, Germany. “Apart from banks, European companies in the Brexit quarter seem to be doing well and that should calm things down. But we have to be aware what the Fed tells us tonight after their two-day meeting, and we have the bank stress tests on Friday. So, there is quite a bit on our plate still. For today, the glass is half-full.”

The Stoxx 600 closed 1 percent away from its June 23 level, the day of the U.K. vote on European Union membership, still lagging behind equities in the U.S. and Asia, which have already recovered. President Mario Draghi said last week the European Central Bank will consider increasing stimulus when it has a clearer picture of the Brexit impact. Lenders have suffered the most since the referendum, and regulators will publish their latest health check on Friday.

Among companies moving on corporate results:
* LVMH jumped 7.5 percent after the world’s biggest luxury-goods maker reported stronger demand for its champagnes and cognacs.
* Telecom Italia surged 7.8 percent after posting the steepest increase in domestic quarterly earnings in seven years.
* Santander rose 4.4 percent after posting profit that topped expectations.
* PSA Group rallied 9.3 percent, leading a gauge of automakers to the best gain among industry groups, after the maker of Peugeot and Citroen cars reported a jump in first-half earnings.
* Airbus Group SE added 4.5 percent as its earnings beat analysts’ estimates.
* U.K. property website operator Rightmove Plc surged 8.7 percent as revenue beat analyst estimates.
* ITV Plc rallied 6.8 percent after the British broadcaster reported a rise in first-half sales.
* GlaxoSmithKline Plc added 1.8 percent after earnings topped estimates.
* Apple Inc. suppliers Dialog Semiconductor Plc and AMS AG rose more than 3.7 percent after the U.S. company said iPhone demand picked up. STMicroelectronics NV jumped 11 percent as its earnings beat projections.
* Deutsche Bank AG slid 3.2 percent after saying profit was almost wiped out by a slump in trading revenue and costs tied to job reductions.
* Osram Licht AG sank 6.8 percent after the lighting company posted a slump in net income.
* BASF SE fell 1.9 percent after reporting quarterly profit that missed analysts’ estimates.
* Statoil ASA dropped 1.5 percent as it posted its first adjusted loss.

On other company news, UniCredit SpA lost 4.1 percent after people familiar with the matter said the Italian bank is considering a share sale and exit from Poland to raise capital. It also ended talks with Santander and private equity funds to combine the two lenders’ asset management units.

U.K. shares climbed after a report showed that the economy in the second quarter grew faster than projected. The FTSE 250 Index of mid-cap companies -- those more sensitive to the domestic economy -- rose 1.2 percent and briefly erased its post-Brexit losses in intraday trading before trimming its advance. The FTSE 100 Index of megacaps added 0.4 percent, closing at its highest level since August.

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