Advertisement
Canada markets closed
  • S&P/TSX

    22,167.03
    +59.95 (+0.27%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • CAD/USD

    0.7387
    +0.0000 (+0.00%)
     
  • CRUDE OIL

    83.11
    -0.06 (-0.07%)
     
  • Bitcoin CAD

    95,759.87
    +1,776.42 (+1.89%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • GOLD FUTURES

    2,254.80
    +16.40 (+0.73%)
     
  • RUSSELL 2000

    2,124.55
    +10.20 (+0.48%)
     
  • 10-Yr Bond

    4.2060
    +0.0100 (+0.24%)
     
  • NASDAQ futures

    18,465.00
    -38.75 (-0.21%)
     
  • VOLATILITY

    13.01
    +0.23 (+1.80%)
     
  • FTSE

    7,952.62
    +20.64 (+0.26%)
     
  • NIKKEI 225

    40,396.43
    +228.36 (+0.57%)
     
  • CAD/EUR

    0.6851
    +0.0008 (+0.12%)
     

UPDATE 2-European shares edge higher on earnings lift; growth fears persist

* Credit Agricole tops France's CAC40 on Q2 beat

* Credit Suisse mulls cutting thousands of jobs - report

* Lufthansa sees return to annual profit as travel picks up

* STOXX 600 inches up 0.2% (Adds comment, details, updates prices)

By Bansari Mayur Kamdar and Anisha Sircar

Aug 4 (Reuters) - European shares eked out gains on Thursday as some strong quarterly results lent support, while Britain's FTSE 100 underperformed peers after the UK central bank lifted interest rates by the most since 1995.

The pan-European STOXX 600 index, earlier up 0.3% and hitting near two-month highs, eked out a gain of 0.2% by the close, with UK'S FTSE 100 flat.

ADVERTISEMENT

The Bank of England raised interest rates by 50 basis points, the most in 27 years, to 1.75% despite warning that a long recession is on its way, as it rushed to smother soaring inflation.

The European Central Bank raised rates by 50 basis points last month and guided for more hikes ahead.

"As the (euro zone) economy underperforms and interest rates rise, we expect European equity prices to fall over the rest of the year," economists at Capital Economics said in a note.

"While a recession is likely, we still think the ECB will raise rates fairly aggressively over the coming quarters, pushing up bond yields. And given the significant hurdles for the Bank to use its Transmission Protection Instrument (TPI), spreads will widen."

The ECB's TPI is a bond purchase scheme aimed at helping more indebted countries and preventing financial fragmentation.

Europe's benchmark index is down 10% this year on growing concern over the outlook for equities from a potential disruption to Russian gas supplies, aggressive monetary tightening cycles, strong price pressures and recession fears.

Consumers in the euro zone are bracing for the economy to shrink and for high inflation to continue eating into their income in the next year, an ECB survey showed.

Among stocks, Credit Suisse Group AG is discussing cutting thousands of jobs globally, a media report stated, citing people familiar with the matter. Shares of the Swiss bank rose 1.7%

Credit Agricole rose 4.7% as it joined French lenders BNP Paribas and Societe Generale in announcing a better-than-expected quarterly profit amid record activity at its investment banking division.

Lufthansa rose 6.4% as it said it expected demand for short-haul flights in Europe to drive growth at its passenger airlines this year, forecasting a return to group operating profit for the full year.

Glencore reaped a multi-billion dollar windfall, as the company's adherence to thermal coal mining generated record profits for the mining and commodity trading group. Shares rose 3.1%. (Reporting by Bansari Mayur Kamdar and Anisha Sircar in Bengaluru; Editing by Shounak Dasgupta and Mike Harrison)