European Stocks Surging Higher On Earnings Optimism

European stocks are up in positive territory on Tuesday as strong economic data from China, and some upbeat earnings updates from top U.S. companies Bank of America and Johnson & Johnson help outweigh concerns about interest rates.

China’s gross domestic product was up 4.5% on year in the first quarter of 2023, the National Bureau of Statistics said today. That beat expectations for an increase of 4% and was up from 2.9% in the three months prior.

On a seasonally adjusted quarterly basis, GDP gained 2.2% – matching forecasts following the flat reading in the previous quarter.

The bureau also said that industrial production was up 3.9% on year in March, missing expectations for 4% but still up from 2.4% in February.

Investors are shrugging off data showing a drop in the ZEW economic sentiment index in the Euro area as well as Germany in the month of April.

The pan European Stoxx 600 is up nearly 0.5%. The U.K.’s FTSE 100 is advancing 0.2%, Germany’s DAX is surging 0.61% and France’s CAC 40 is climbing up 0.64%, while Switzerland’s SMI is up 0.54%.

In the UK market, Polymetal International is surging more than 7.5%. Entain is climbing nearly 5%, while Fresenillo and Anglo American are rising 3.8% and 3.7%, respectively.

Antofagasta, Glencore, Barclays, Melrose Industries, Just Eat Takeaway.com, BHP Group and Burberry Group are gaining 1.5 to 2.3%.

EasyJet is gaining more than 2% on optimism about earnings.

TUI, Centrica, Compass Group and GlaxoSmithKline are notably lower.

In Paris, Societe Generale is up 2.7%. BNP Paribas, Capgemini, Kering, AXA, Carrefour, Hermes International, Renault, Legrand LVMH are gaining 1.5 to 2.3%.

In the German market, Deutsche Bank, MTU Aero Engines, Commerzbank and Covestro are advancing 2 to 2.7%.

Infineon Technologies is up nearly 2%, while Siemens Healthineers, Brenntag, Mercedes-Benz, Sartorius, Vonovia and Continental are gaining 1 to 1.5%.

On the economic front, the ZEW Indicator of Economic Sentiment for the Euro Area dropped by 3.6 points to 6.4 in April 2023, from a score of 10 in the prior month. The reading dropped for a second straight month after five consecutive months of increases, due to uncertainty about the outlook for inflation, growth and interest rates.