Paris - European stocks rose on Thursday as strong results from JPMorgan Chase helped the market bounce back from early losses and resume its 1
½ week rally.
Kicking off the quarterly earnings season for US banks, JPMorgan reported a sharp rise in second-quarter profit after setting aside less money for loan losses.
"JPMorgan once again exceeded expectations. The pattern is the same as the last two quarterly results: The investment bank is a well-engineered profit machinery, while there are still problems in their consumer lending business with charge-offs and delinquencies," said Christian Tegllund Blaabjerg, chief equity strategist at Saxo Bank in Copenhagen.
"That said the loan-loss reserves continue to be reduced, which indicates that JPMorgan is on the right path to recovering this part of the business."
At 11:15 GMT, the FTSEurofirst 300 index of top European shares was up 0.3% at 1 047.82 points, while the Euro STOXX 50, the eurozone's blue chip index, was up 0.2% at 2 744.27 points.
The blue chip index moved above 2 737.62, its key 50% retracement level of a move from its April high to its June low.
The STOXX Europe 600 banking index reversed early losses and turned positive, with UBS among the biggest gainers, up 0.4%.
Consolidation wave
Greek banks rose 6% after Piraeus Bank offered to buy stakes in ATEbank and Hellenic Postbank, sparking hopes of a consolidation wave in the country's banking sector that has been hammered over the past nine months by fears about the country's debt crisis.
The Greek bank index is still down 60% since mid-October 2009.
Around Europe, UK's FTSE 100 index was up 0.1%, Germany's DAX index up 0.3%, and France's CAC 40 up 0.2%.
The FTSEurofirst 300 has jumped some 8% since July 5, following a two-week sell-off. "I get the feeling that there remains a lot of cash sitting on the sidelines that missed the move higher over the last seven days," City Index strategist Joshua Raymond wrote in a note.
"If companies' earnings continue to outperform, there is every chance that this will provide the cherry to entice that cash back into the market which could help drive indices higher. But in truth, that is a big 'if'."
Investors' risk appetite continued to grow on Thursday despite a lack of clear direction in equities, with the VDAX-NEW volatility index, Europe's main barometer of investor anxiety, falling 4.7% to a 2
½ month low.
GlaxoSmithKline climbed 2% in a relief rally following a US panel of health experts vote to keep the drugmaker's diabetes pill Avandia on the market but with new warnings on heart risks.
But Glaxo's rise was limited by news of a hefty
£1.57bn legal charge for Avandia and other long-standing legal cases.
- Reuters