European stocks inched higher Thursday as investors react to rising U.S.-China tensions and a slew of corporate earnings.
The pan-European Stoxx 600 climbed 0.5% in early trade, with autos jumping 2.7% to lead gains while utilities shed 0.4%.
Tensions between China and the U.S. escalated this week after the U.S. claimed two Chinese hackers targeted American companies working on virus research and were stealing information from companies around the world, both for profit and on behalf of the Chinese government.
Then, the U.S. ordered the shutdown of China’s Houston consulate, claiming it was a necessary step to protect intellectual property and the data of private citizens. The move drew condemnation from China’s foreign ministry as it warned of firm countermeasures if the U.S. does not reverse its decision.
In other news, U.S. stocks also rallied toward the end of the trading session Wednesday after sources told CNBC that congressional Republicans are weighing an extension of watered-down federal unemployment benefits through the end of the year.
On Thursday, the Labor Department will release its latest report on weekly jobless claims. The weekly figures provide Wall Street with critical insight on how many Americans continue to collect unemployment benefits, known as continuing claims.
Meanwhile, Asia Pacific markets traded mixed on Thursday with Chinese mainland shares selling off and South Korea reporting a decline in second-quarter GDP, largely due to a steep fall in exports.
German consumer confidence has soared on the back of a return to economic activity and landmark stimulus measures in Europe, new data revealed Thursday. The forward-looking GfK Institute consumer confidence reading rose to -0.3 for August compared to -9.4 in July.
Earnings in focus
Roche posted a 5% fall in net profit for the first half of the year on Thursday, with net income coming in at 8.5 billion Swiss francs ($9.15 billion) as the coronavirus pandemic and a strong Swiss franc weighed on earnings. Sales also fell 4%, but the Swiss drugmaker maintained its 2020 outlook.
Unilever reported a much smaller-than-expected 0.3% fall in quarterly sales Thursday, with analysts having forecast a 4.3% decline. The Anglo-Dutch consumer goods company’s shares jumped 6.8% in early trade.
Daimler saw a second-quarter loss of 1.68 billion euros ($1.9 billion) but projected a rise in profit this year for its Mercedes-Benz cars and vans division as sales begin to rebound.
In terms of individual share price action, Publicis Groupe shares rallied 12.3% in early trade after the French advertising company beat profit expectations.
At the other end of the European blue chip index, Swedish construction company Skanska fell 5.6% after reporting a steep fall in second-quarter profit.
