European shares edge higher as strong earnings offset French unrest worries
"The politics would sort of continue to be a bit of an anchor on shorter-term performance."
European shares edged higher on Wednesday (21 October), as a slate of strong corporate earnings helped even as sentiment remained battered by concerns over violent unrest in France.
Since riots erupted over the weekend in France, the second-largest economy in the euro zone, European stocks slipped about 1%. The country's government said it would ensure a massive deployment of troops to control the violence.
On Wednesday, investors picked up luxury stocks, riding on eyewear group EssilorLuxottica's strong results. The company topped the French share benchmark, which rose 0.4%.
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The pan-European STOXX 600 index was up 0.24% at 640.20 points.
"Good earnings, of course, would be helpful ... but I don't think it will be the dominant story," said Ben Gutteridge, head of market insights at Invesco.
"The politics would sort of continue to be a bit of an anchor on shorter-term performance."
The automobiles sector fell 1.2%, the most among individual sectors.
The STOXX 600 is up more than 8% so far this year but remains below the yearly highs it touched in August, as inflation concerns and political jitters have weighed on the index.
It has underperformed its US peer S&P 500's, which is up 12.7%.
THE FRENCH STORY
The unrest in France has added to concerns about the country's weakening public finances and slowing growth.
Carrefour dropped 13.3% after the supermarket chain cut its annual earnings forecast, saying riots, looting and curfews had raised costs and disrupted trading at its stores.
Tyre maker Michelin declined 5.4% after reporting a drop in nine-month sales.
EARNINGS WATCH
Randstad jumped 19% after the recruitment firm reported organic revenue growth of 3.9% for the third quarter, beating analysts' average forecast of 2.9%.
DSV gained 7.9% after the transport and logistics firm reported a rise in its third-quarter revenue.
Investors are also awaiting results from SAP due after European markets close, and Nokia and Barclays on Thursday which could help set the direction for stocks.
