Earnings help European shares erase nearly all losses from French unrest

FRANKFURT: European shares rose on Wednesday, recouping nearly all of their losses since the weekend turmoil in France as strong earnings encouraged investors to look past the economic and political uncertainty.

The pan-European STOXX 600 index added 0.92 percent and closed at 644.49 points, led by a 20 percent jump in Randstad after the Dutch recruiter’s management struck a cheerful tone for 2027 following quarterly sales and profit beats.

Ray-Ban maker EssilorLuxottica’s 15.5 percent jump post earnings also helped the benchmark, and pushed luxury stocks to their highest in more than five weeks.

The gains show that solid corporate earnings are still capable of bolstering markets even as macroeconomic uncertainty persists, and vindicate investors who had counted on results to keep stocks afloat.

Earnings this quarter have also shown unusual breadth. Third-quarter earnings for the STOXX 600 are expected to grow at one of the fastest rates in years, according to LSEG data.

France’s CAC 40 index rose for the first time this week, ending 1 percent higher. Riots erupted over the weekend in the euro zone’s second-largest economy, battering sentiment.

France’s government said it would ensure a massive deployment of troops to control the violence, but investors advocated caution.

“The politics would sort of continue to be a bit of an anchor on shorter-term performance,” said Ben Gutteridge, head of market insights at Invesco.

The European automobiles sector fell 1.7 percent, leading losses.

The STOXX 600 is up about 8 percent so far this year but remains below the yearly highs it touched in August, as inflation concerns and political jitters have weighed on the index. It has underperformed its US peer, the S&P 500, which is up 12.7 percent.

On Wednesday, Carrefour dropped 13.8 percent after the supermarket chain cut its annual earnings forecast, saying riots, looting and curfews had raised costs and disrupted trading at its stores.