European stocks inch up as Nestle surges; investors map French politics
European stocks rose slightly, driven by Nestle's 7.9% surge, its best performance since 2008, following strong sales and job cuts. The pan-European STOXX 600 index increased by 0.1%, supported by positive earnings from major firms like LVMH and ASML. Sartorius shares jumped after strong quarterly results, while Pernod Ricard and Whitbread faced declines. French Prime Minister Lecornu is expected to survive no-confidence votes amid ongoing political challenges in France, which has seen its stock market lag behind Europe this year.
Nestle set for best day since Oct 2008
Lecornu faces no confidence votes in parliament
Sartorius rallies after results
(Updated at 0840 GMT)
By Sruthi Shankar
Oct 16 (Reuters) - European shares edged higher on Thursday as investors took comfort from broadly positive corporate results, including from Nestle, after a volatile week marked by tariff worries.
The pan European STOXX 600 (.STOXX) rose 0.1% by 0840 GMT, with gains in food and beverage stocks (.SX3P) offsetting weakness in travel and leisure (.SXTP) .
The world’s largest packaged food company Nestle (NESN.S) jumped 7.9%, its biggest rise since 2008, after reporting stronger-than-expected sales and unveiling 16,000 job cuts under new CEO Philipp Navratil.
Better-than-expected earnings from major U.S. and European firms this week also helped lift sentiment after last week’s U.S.-China trade jitters.
“We’ve got the top market cap companies LVMH and ASML beating market expectations and that sets a very good scene for the rest of the earnings season,” Janet Mui, head of market analysis, RBC Brewin Dolphin.
STOXX 600 companies are expected to post a 0.5% increase in third-quarter earnings, as per LSEG IBES data, up from 0.2% dip forecast a week ago.
Results from European banks and defence companies will be “interesting to watch,” Mui said, because of their big share surges since the start of the year.
German lab supplies maker Sartorius (SATG.DE) and its French unit Sartorius Stedim Biotech (STDM.PA) jumped 11.3% and 12%, respectively, after the companies issued quarterly results and forecasts.
French spirits maker Pernod Ricard (PERP.PA) dipped 1.3% after it reported a well-flagged 7.6% fall in first quarter sales, due to weak consumer demand and destocking in China and the United States.
On the flip side, UK’s Whitbread (WTB.L) dropped 7.7% after the hotel and restaurant operator posted a 7% drop in half-year profit due to lower food and beverage sales.
Meanwhile, French Prime Minister Sebastien Lecornu appears likely to survive two no-confidence votes in parliament on Thursday after offering to suspend President Emmanuel Macron’s landmark pension reform to win support from the left.
French stocks have lagged broader European markets this year as the country grapples with one its worst political crisis in decades as a succession of minority governments seek to push deficit-reducing budgets through a truculent legislature split into three distinct ideological blocs.
France’s blue-chip CAC 40 index (.FCHI) was nearly flat in morning trade.
