Strong bank earnings propel European shares higher | News

By Medha Singh

(Reuters) – Bank stocks propped up European shares on Wednesday after a flurry of strong results including from Spain’s Santander and Britain’s Virgin Money, even as investors weighed the potential economic impact of the fast-spreading coronavirus.

The pan-European STOXX 600 <.STOXX> rose 0.6%, clawing back most of its losses from a selloff on Monday.

Spain’s IBEX <.IBEX> outperformed regional bourses, lifted by a 3.6% rise in Santander . The lender posted a higher quarterly net profit, boosted by solid underlying performance in its main market Brazil and capital gains.

Additionally, Virgin Money UK increased its business loan book and Swedish banking group SEB reported higher-than-expected fourth-quarter earnings.

The banks index <.SX7P> climbed nearly 1%, providing the biggest boost to the benchmark index.

“We have a huge number of earnings reports and the numbers look pretty solid at the start of the earnings season,” said Neil Campling, Mirabaud’s head of TMT Research.

“But there is obviously caution as further news comes out of China regarding the coronavirus,” he added.

The STOXX 600 shed nearly 3% on Monday as investors worried about the economic impact of the flu-like virus, which has now claimed 132 lived and infected more than 5,327 people in China.

Investor attention now turns to central bank meetings from around the world. The U.S. Federal Reserve is almost certain to keep interest rates on hold at the end of a two-day policy meeting on Wednesday, while expectations of a rate cut by the Bank of England on Thursday stand at 50%.

Friday will mark the UK’s official departure from the European Union.

Overnight, the British government said it will introduce a bill in parliament on Wednesday for legislation to end automatic rights for European Union vessels to fish in UK waters.

Shares of Apple Inc suppliers including Infineon Technologies AG , AMS AG and STMicroelectronics NV , gained after the iPhone maker beat sales and profit estimates for the holiday shopping quarter.

In the telecom space, Norway’s Telenor rose 1.2% after higher-than-expected quarterly operating profit, while Dutch firm Royal KPN NV dropped 7.2% as it reported weak mobile services revenue.

(Reporting by Medha Singh in Bengaluru; Editing by Bernard Orr)

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