European stock markets advanced on Thursday, lifted by strong corporate earnings from companies like Unilever and Safran, alongside renewed optimism for peace in the Middle East that brightened overall investor sentiment.
The Stoxx Europe 600 index closed 0.3% higher, edging closer to the record high set in early July. Personal care and media sectors led the gains, while energy and utilities were the worst performers.
Unilever shares surged 8%, marking their biggest single-day gain since 2022, after the consumer goods giant reported second-quarter sales growth that exceeded analyst expectations.
French defense group Safran rose 2.9% after posting first-half results that beat forecasts and raising its full-year guidance.
The European earnings season has so far provided reassurance. According to data compiled by Bloomberg, roughly half of the companies in the MSCI Europe index that have reported results have beaten expectations. This has partially offset the impact of a sharp sell-off in global semiconductor stocks on Tuesday, driven by investor concerns over excessive spending on artificial intelligence.
"One thing is certain: the strong performance this earnings season means investors have other options after pulling out of semiconductor stocks," said Olivier David, a portfolio manager at Paris-based Vega Investment Solutions. "If corporate results had been poor, the situation would have been completely different."
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