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Positive earnings give European shares a boost but SocGen weighs

Published 15/03/2018, 10:16
© Reuters. The German share price index, DAX board, is seen at the stock exchange in Frankfurt
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By Danilo Masoni

MILAN (Reuters) - European shares rose on Thursday, buoyed by good results from companies including insurance heavyweights Munich Re (DE:MUVGn) and Generali (MI:GASI), while Societe Generale (PA:SOGN) fell after its deputy CEO unexpectedly resigned.

SocGen shares slid 2.5 percent after the French bank said Didier Valet was leaving ‍following "a divergence of approaches regarding management of a specific legal matter", without elaborating.

A source familiar with the matter said the divergence related to investigations over the suspected rigging of the Libor interbank rate, although brokers raised concerns over the impact of litigations.

"These uncertainties will put further pressure on the share price, in particular concerns about the triple litigations and the now obvious material disagreements on how to handle them," KBW said. SocGen fell as much as 4.3 percent to their lowest level in more than 2 months.

Gains in the insurance sector (SXIP) and strength among tech stocks >.SX8P>, however, helped push the pan-European STOXX 600 (STOXX) index up 0.3 percent by 0945 GMT.

Munich Re (DE:MUVGn) rose 1.4 percent after the world's largest reinsurer raised its 2018 profit forecasts and said it plans to buy back 1 billion euros in shares.

Generali also rose 1.9 percent after it raised its dividend following record operating profit.

Top gainer on the STOXX was British valve maker Spirax-Sarco Engineering (L:SPX), up 4.5 percent after it reported better-than-expected full-year revenues and profit.

However, Swedish clothing firm H&M (ST:HMb) published lower-than-expected quarterly sales, sending shares in the world's second-biggest fashion retailer down 4.6 percent.

Dufry (S:DUFN) shares fell 7 percent after results with traders attributing the drop to a lack of clarity on its dividend plans.

Banks (SX7P) rose slightly after the European Central Bank released long-delayed guidelines on treating new soured bank debt. The guidelines will go into effect on April 1 but lenders may get a reprieve from full implementation until 2021.

"All looks pretty much in line with expectations with a mild improvement on the schedule of provisioning," Mediobanca Securities said in a note to clients. "We see a mildly net positive for banks today."

© Reuters. The German share price index, DAX board, is seen at the stock exchange in Frankfurt

Italian banks (FTIT8300), which hold nearly one third of the euro zone bad loan pile, gained 0.3 percent.

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