The STOXX 600 index closed at a record high on Thursday, led by gains in energy stocks after the U.S. imposed new sanctions on Russia, while investors also gauged the health of corporate Europe from a batch of earnings reports.
The continent-wide benchmark index ended 0.37% higher at 574.43 points.
Energy stocks gained 2.7% and marked their strongest session since mid-April as crude prices soared 5% after the U.S. slapped sanctions on major Russian suppliers over Moscow’s intensifying war with Ukraine.
“On the face of it, the announcement of sanctions by the U.S. on Rosneft and Lukoil is a major escalation in the targeting of Russia’s energy sector and could be a big enough shock to flip the global oil market into a deficit next year,” said David Oxley, chief climate and commodities economist at Capital Economics.
“That said, the lasting impact on the oil market and oil prices will depend on how long any sanctions remain in place, and how effectively they are enforced.”
Meanwhile, quarterly updates from European companies were in full swing as market participants looked for signs of whether trade uncertainty was impacting corporate profitability.
Luxury stocks gained 1.2%, with Kering jumping 8.7% after the Gucci owner said sales in the previous quarter declined less than analysts had expected.
On the other hand, travel and leisure stocks slid 2.2%, hurt by a dour forecast from Sodexo and disappointing results from Evolution. Both stocks lost 7% each.
Shares of STMicro electronics were halted multiple times during Thursday’s session and last settled 14.1% lower as the chipmaker forecast fourth quarter sales below market expectations due to weak automotive sales.
Dassault Systèmes was not far behind with a 13% loss after the French software company cut its full-year revenue growth guidance.
Earnings of 50.0% of the STOXX 600 companies that have reported results as of Tuesday exceeded analyst estimates, data compiled by LSEG showed, lower than the 54% beat seen in a typical quarter.
Among others, SAP’s shares were volatile and finished 2.2% higher after Europe’s largest software maker announced better than expected results. However the German company forecast full-year cloud revenue at the lower end of its outlook range.
Switzerland’s bourse slipped 0.4% limited by drugmaker Roche 3.2% slide after sales of its new treatments for eye disease and haemophilia disappointed the market.
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