(Bloomberg) -- European stocks rose, bolstered by strong earnings from companies including luxury-goods maker Hermès International SCA and UK lender NatWest Group Plc as well as a tame reading on inflation in the US.
The Stoxx 600 Index ended the session 0.8% higher, with almost every sector in positive territory. The benchmark bounced back from two days of declines, giving it a gain of 0.6% for the week, which marked the busiest period for second-quarter earnings reports.
Consumer stocks led the day’s advance, with Hermès gaining 3.4%. The Birkin bag maker reported a jump in sales, boosting sentiment toward the recently battered luxury sector and spurring gains in the likes of LVMH, Kering SA and Moncler SpA. Results and news of Meta Platforms Inc.’s interest in a stake in EssilorLuxottica SA boosted shares of the eye-wear maker, while NatWest soared 7% after it upped its forecast for full-year revenue.
Still, this year’s rally has stalled — the Stoxx 600 last set a record on May 15 — amid worries over economic growth, geopolitical risks and some underwhelming corporate results.
“While numbers are broadly OK to us, and year-on-year EPS growth is positive again, results have failed to lift market sentiment, with Europe looking softer than the US,” wrote Barclays strategist Emmanuel Cau in a note.
Morgan Stanley strategists including Regiane Yamanari said there has been a material negative price skew on results so far in this earnings season. “We believe this is driven by broad market concerns around economic growth coupled with market repricing to more rate cuts driving a rotation into bond-yield-sensitive stocks,” they wrote in a note.
In the US, the so-called core personal consumption expenditures price index, which strips out volatile food and energy items, increased 0.2% in June from May, an encouraging sign for Federal Reserve officials who are looking to cool inflation without breaking the economy. On Thursday, data showed US economic growth accelerated by more than forecast in the second quarter.
Among the day’s corporate results, BASF SE shares dropped after earnings declined slightly in the second quarter. Mercedes-Benz Group AG trimmed an earlier slump of as much as 3% after its earnings plummeted 19% as sales of its passenger electric vehicles dropped sharply and demand in China weakened.
Among other individual movers, Capgemini SE dropped as much as 11% after cutting its growth guidance for the full year and Anglo American Plc rose after UBS Group AG analysts upgraded the stock.
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--With assistance from Sagarika Jaisinghani, Jan-Patrick Barnert, Farah Elbahrawy and Kit Rees.
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