European Stocks Extending Gains In Cautious Trade; ECB Policy In Focus

European stocks are mostly up in positive territory on Thursday, extending recent gains amid continued optimism about earnings and hopes that a momentum shift in vaccination drive will help curb the spread of the Covid-19 pandemic.

Investors, reacting to quarterly earnings news and other corporate announcements, are also looking ahead to the European Central Bank’s monetary policy statement, due later in the day.

The bank is expected to keep its policy rates and stimulus package unchanged at the rate-setting meeting of the year. The announcement is due at 7.45 am ET. ECB President Christine Lagarde is set to hold the customary press conference at 8.30 am ET.

The pan European Stoxx 600 is rising nearly 0.5%. Germany’s DAX is climbing 0.48% and France’s CAC 40 is up 0.66%, while the U.K.’s FTSE is up marginally. Switzerland’s SMI is down slightly, weighed down by weak results from Credit Suisse.

In the UK market, Experian Plc shares are rising more than 3.5%. Melrose Industries shares climbed higher thanks to a rating upgrade of the stock by investment bank Peel Hunt. Aveva Group, IAG, Scottish Mortgage, Rolls-Royce Holdings, Polymetal International and RightMove are also notably higher.

On the other hand, BAE Systems, Fresnillo, Rentokil Initial, Antofagasta and Informa are down sharply.

In France, WorldLine SA shares are up more than 4%. STMicroElectronics is up by about 3.5%, while Veolia and Hermes International are gaining 2.8% and 2.4%, respectively.

Shares of drinks maker Pernod Ricard are up 2% after the company reported strong sales growth in the three months to the end of March, helped by strong demand in its key U.S. and Chinese markets.

LVMH, Faurecia, Schneider Electric, Dassault Systemes and Valeo are also notably higher. Lenders BNP Paribas and Societe Generale are up with modest gains.

Orange shares are weak. Although the company saw an increase in first quarter revenues at €10.3 billion, its core operational profits retreated 0.3% to €2.6 billion in the quarter.

Renault is lower by more than 2% after the French car maker’s revenue unexpectedly fell in the first quarter as it lagged behind European peers in recovering from the pandemic.

In Germany, RWE shares are up more than 3.5% and Siemens is gaining about 2.5%, while Infineon, Continental, Delivery Hero, Henkel, E.ON, and MTU Aero are up 1 to 2%.

SAP is rising 1.7% after the company said its net profit for the first quarter rose on year to 1.65 billion euros from 1.02 billion euros in the year ago quarter. and confirmed an increase in operating profit which it had announced earlier in the month.

Deutsche Bank, Covestro, HeidelbergCement and Merck are weak.

Shares of Swiss lender Credit Suisse are down 5.8%. The bank reported a net loss of 252 million Swiss francs ($295 million) in the first quarter. The bank said the loss reflected a “significant charge with respect to the US-based hedge fund Archegos Capital matter in the first quarter, offsetting positive performance across wealth management and investment banking.”

In economic news, monthly survey data from the statistical office Insee showed French manufacturing confidence improved in April, with the manufacturing sentiment index advancing to 104 in the month from 99.0 in March. Economists had forecast the index to remain at 99.0.

The reading exceeded its long-term average of 100 for the first time since February 2020.

UK manufacturing orders grew at the fastest pace in two years and the optimism among manufacturers rose the most since 1973, survey results from the Confederation of British Industry showed on Thursday.

The order book balance rose to +5% in three months to April from -12 percent in January, the latest Industrial Trends survey revealed. This was the biggest growth since April 2019.

Business sentiment in the quarter to April advanced to +38 percent from -22 percent in January. This was the fastest growth since April 1973.

Switzerland’s exports grew in the first quarter, data from the Federal Customs Administration showed. The report said exports increased 4.9% sequentially in the first quarter, following a 13% rise in the fourth quarter.

Imports grew 1.9% in the first quarter, after a 1.1% drop in the previous quarter. The trade surplus rose to CHF 11.28 billion in the first quarter from CHF 9.405 billion in the previous quarter.