European shares rise as upbeat earnings blunt virus fears
By Sruthi Shankar
Oct 19 (Reuters) - European stocks rose on Monday as strong earnings updates from Swiss wealth manager Julius Baer and Dutch firm Philips overshadowed worries about fresh coronavirus restrictions across the continent.
The pan-European STOXX 600 index .STOXX advanced 0.6%, resuming gains after last week's small losses.
Julius Baer BAER.S gained 5.1% after it indicated an improvement in profitability for the first nine months of 2020 as client activity increased and it cut costs.
That helped the broader financial services sector .SXFP rise 1.2%, with Credit Suisse CSGN.S and UBS UBSG.S up between 2.4% and 3.4%.
Health technology company Philips PHG.AS rose 2.9% as it reported a better-than-expected 32% jump in core earnings.
European third-quarter earnings are forecast to recover from a pandemic-led slump, with analysts expecting companies on the STOXX 600 to report an average 36.7% drop, compared with a 51% drop in the previous quarter, according to Refinitiv data.
Also lending support was hopes of a coronavirus vaccine by the end of the year and a fresh U.S. stimulus package before the November presidential election.
"Markets, for now, are merely relieved that at least the two sides continue to talk," wrote Jeffrey Halley, senior market analyst at Oanda.
That encouraged investors to look past concerns about new curbs in various parts of Europe and their impact on a nascent economic recovery.
As daily cases in Italy hit a new record over the weekend, Prime Minister Giuseppe Conte gave mayors the power to shut public squares from 9 p.m. to halt gatherings. Meanwhile, Britain's government scientific adviser said the country needs to impose a three-week period of national lockdown restrictions.
"A double-dip recession in Europe could have knock-on effects across the world, including Asia and is very much an ignored unknown," wrote Halley.
Danone DANO.PA, the world's largest yoghurt maker, advanced 1.4% as the French company reinstated its forecasts for 2020 and said it was launching a review of its assets.
Swedish defence company Saab SAABb.ST sank 10.4% to the bottom of STOXX 600 after it reported a fall in third-quarter profit and could not confirm its previous financial outlook for the year.
French carmaker Renault RENA.PA slipped 1.6% after news that it would unveil an eight-year turnaround plan next year as it copes with a demand slump.
In UK, online fashion group Boohoo BOOH.L slumped 12% after it confirmed that PwC will not compete to be the new auditor amid allegations about working conditions in its supply chain.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)
((firstname.lastname@example.org; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))