European shares shrug off HSBC miss as other earnings, oil relief lift sentiment

By Reuters News

By Avinash P and Niket Nishant

- Strong earnings and a pullback in crude prices helped European shares close higher on Tuesday, erasing losses from earlier in the session when HSBC weighed on sentiment following a quarterly revenue miss.

The pan-European STOXX 600 index .STOXX rose 0.47% to 643.68 points, after falling as much as 0.41% earlier in the day.

The gains place the index on a potentially stronger footing ahead of the European Central Bank's rate decision, due on Thursday, where policymakers are expected to keep borrowing costs steady.

"We expect (ECB) President (Christine) Lagarde to strike a balanced message between ongoing upside risks from energy prices, benign underlying inflation data and tighter financial conditions," Goldman Sachs analysts wrote.

Austrian circuit board manufacturer AT&S ATSV.VI and Dutch chip tool maker Besi BESI.AS were the top gainers on the index, rising 11.5% and 11.4%, respectively.

US semiconductor equipment maker Applied Materials AMAT.O said it would increase its stake in Besi to about 20%.

Switzerland's SIG Group SIGNC.S also rose around 10% after beating sales estimates for the third quarter.

"The earnings results, generally speaking, have been pretty solid," said Richard Flax, chief investment officer at Moneyfarm.

However, there is some wariness among equity investors about assuming the very strong growth results seen so far will continue, he added.

Results from HSBC HSBA.L, Europe's largest bank, bucked a recent trend of strong performances in the banking sector, disappointing investors.

Shares of the London-based bank fell more than 5%, touching a more than four-month low after its revenue missed estimates, in part due to slower growth at its wealth business.

The declines dragged Britain's FTSE 100 .FTSE 0.75% lower.

French equities .FCHI inched 0.51% higher after falling more than 2% last week as protests rattled the euro zone's second-largest economy.

Student leaders have vowed to go on protesting despite government concessions on education, as the movement spreads to unions and other activists.

French consumer confidence fell in October to its lowest level since June 2013, data showed on Tuesday.

Among other movers, Novartis NOVN.S raised its full-year core operating income guidance, sending shares of the Swiss drugmaker up 1%.

The technology index .SX8P traded around 2% higher, tracking global optimism in the wake of Anthropic's IPO filing, while miners .SXPP gained over 2%, tracking higher base metal prices.

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