European stocks advanced on Friday, extending their highest level since 2007, amid better-than-expected financial results from companies including Airbus Group NV, and US consumer sentiment data.
The STOXX Europe 600 Index rose 0.4 percent to 392.21 at the close of trading. Shares earlier fell as much as 0.3 percent, before advancing as a report showed the University of Michigan final index of sentiment last month fell less than analysts estimated.
The STOXX 600 rallied 6.9 percent last month, pushing gains this year to 15 percent, as Greece reached a bailout deal and the European Central Bank announced quantitative easing.
“Investors are still on the hunt for yield,” said Alessandro Bee, a strategist at Bank J Safra Sarasin AG in Zurich. “In the long term, fundamentals are still favorable for stocks and the feeling is that earnings will improve in Europe. It will be a good year for risky assets, although we might be getting closer to a correction at the moment.”
Airbus advanced 7.2 percent. The European aerospace company reported a 15 percent gain in annual profit after increasing commercial plane deliveries. It also said it would boost monthly production of its A320 single-aisle aircraft to 50 a month by 2017.
Sika AG climbed 2.4 percent. The Swiss adhesives maker resisting a takeover by Cie. de Saint-Gobain SA reported full-year earnings that beat analyst estimates, helped by sales growth in all regions and demand for its mortar business.
IAG SA added 3.7 percent. The parent of British Airways said full-year earnings surged 81 percent, helped by a turnaround at Iberia and strong demand on North American routes.
Bank of Ireland PLC jumped 7.6 percent as its chief executive officer said he was focused on returning the lender to paying dividends after it swung into profit in 2014.
Greece’s ASE Index slid 2.7 percent, for the worst performance of 18 western-European markets. Banks led declines, with Piraeus Bank SA and Eurobank Ergasias SA falling more than 8 percent. The equity gauge still rose 22 percent this month.
A measure of chemical companies declined the most of the 19 industry groups on the STOXX 600. BASF SE dropped 1.6 percent as it forecast a slight increase in sales this year and earnings before special items the same as last year.
Royal Bank of Scotland Group PLC lost 5 percent as two people with knowledge of the matter said the lender has suspended its deputy head of markets as part of a global investigation into currency-rigging allegations.
Salzgitter AG slipped 6.7 percent. Germany’s second-largest steelmaker posted a third consecutive annual loss and forecast pretax profit would probably be in “the lower double-digit million” euros this year.
Europe’s main markets closed mostly higher on Friday, with Frankfurt and London hitting new records, rounding off a successful week for European indices thanks to a deal on Greece’s bailout and positive company results.
The benchmark FTSE 100 index on Friday reached 6,967.24 points, its highest intra-day level on record, before closing almost flat at 6,946.66 points. Frankfurt’s DAX 30 ended the week with a new record close, up 0.66 percent to 11,401.66 points. In Paris the CAC 40 gained 0.83 percent to 4,951.48 points, ending the month at its highest level since 2008.
“Despite the DAX and FTSE 100 having posted several new all-time highs in the past few days ... many are convinced that markets have still further to go especially as the tensions in Eastern Ukraine appear to be easing a bit and Greece’s ‘loan extension’ has been secured,” said Markus Huber, senior analyst at brokers Peregrine & Black.
Additional reporting by AFP
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