PARIS: A clutch of positive earnings including from chipmaker ASML and consumer stock Danone, helped European shares rebound on Wednesday, although worries over the Ukraine-Russia war, slowing growth and rising yields kept gains in check.

The pan-European STOXX 600 ticked up 0.8% making back all of Tuesday’s losses. Rising bond yields which had pressured stocks, fell on Wednesday but were still at elevated levels on hopes of central bank tightening.

Technology stocks were the biggest gainers as chipmaker ASML Holding climbed 5.3% following a first-quarter sales beat.

Danone jumped 5.8% after the French food group posted stronger quarterly sales growth and maintained its 2022 targets, while Heineken rose 5.2% on a sharper rise in quarterly beer sales, allowing the firm to stick to its 2022 forecast.

Capping gains were miners, down 2.6% as Rio Tinto fell 4.8% after reporting lower iron ore shipments in the first quarter and warning of risks from inflation, China’s pandemic-related lockdowns and the Ukraine war.

“Despite the risk rebound, headwinds are likely to prevail in the short term, as lingering risks of a war escalation and sanctions are augmented by tougher central banks and increased signs of slowdown,” said Michele Morganti, equity strategist at Generali Investments.

The STOXX 600 has declined over 5% so far this year, with tech stocks losing 20%, while commodity-linked stocks surged by the same measure on rising prices.

Profits for European companies are expected to have grown by 25% in the three months to end-March, a much lower pace compared to the 60-150% rates of 2021 with outlook for the rest of 2022 being the big question for investors as inflation surges to record highs.

Data on Wednesday showed German producer prices rose 30.9% on the year in March, reflecting the effects of the Ukraine conflict.


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