LONDON: European stocks hit record highs on Thursday, as strong earnings from Novo Nordisk and Siemens helped outweigh weakness in miners and banking shares, with investors eyeing a policy decision from the Bank of England later in the day. The pan-European STOXX 600 inched up 0.3%, extending gains that took the index to all-time highs this week.
Danish company Novo Nordisk rose 4.1% after it raised full-year outlook and posted above-forecast quarterly earnings on strong sales and demand for its new obesity drug. German industrial firm Siemens climbed 3.6% as it lifted its profit forecast for the third time this year.
European stocks are on course for their strongest weekly performance in three months, as upbeat quarterly earnings and loose monetary policy supported markets despite a surge in COVID-19 cases and concerns about inflationary pressures. "Equity markets seem to be a little bit vulnerable right now. There is the Delta variant, fears of tightening as well as peaking earnings growth. We cannot rule out a correction," said Frederique Carrier, head of investment strategy, RBC Wealth Management.
"But so long as there is no recession in sight, markets stand to recover. We continue to be constructive on equities."
Stronger-than-expected quarterly reports have led analysts to lift their projection to a near 140% jump in second-quarter profit for companies listed on the STOXX 600, as per Refinitiv IBES data.
UK's blue-chip FTSE 100 slipped as Lloyds Banking Group tumbled after Goldman Sachs downgraded its stock to sell, while falling metal prices weighed on miners.
Investors' focus is on the Bank of England's policy decision, to be released at 1100 GMT, for clues on when the central bank might start to lay out its plan for reversing its stimulus.