By Josie Cox and Tommy Stubbington
Upbeat earnings helped European markets shrug off poor
industrial production figures for the region Wednesday, and at
least temporarily sideline fears surrounding the economic impact of
the continuing crisis in Ukraine.
The Stoxx Europe 600 closed 0.4% higher. Germany's DAX led the
way, adding 1.4%, having endured a beating in the previous session
following weak investor confidence figures.
On Tuesday, the DAX had closed 1.2% lower while the euro slid
close to a nine-month low, but some investors appeared to recognize
this as an attractive entry point Wednesday.
Shares in E. ON SE climbed more than 5%, after reporting
quarterly figures. Peer RWE AG, as well as HeidelbergCement AG,
Deutsche Telekom AG and Commerzbank AG were among the climbers on
the DAX.
Elsewhere, U.K security company G4S PLC and insurer Swiss Life
Holding AG also rose after both posted robust earnings.
Upbeat earnings helped offset any negative sentiment stemming
from numbers showing that euro-zone industrial production fell for
a second straight month in June.
The euro did come under some pressure on the back of the figures
though, falling 0.2% against the U.S. dollar to $1.3347 before
rebounding.
Sterling, meanwhile, secured the market's attention as it
tumbled to a more than two-month low against the dollar.
The Bank of England in its quarterly Inflation Report warned
that drab wage growth could hold back the timing of a first rise in
interest rates, now penciled in for early 2015.
Data earlier on Wednesday showed that the closely watched wage
component of the monthly U.K. employment report fell shy of
expectations, also burdening the pound.
Bleak macroeconomic data on Wednesday wasn't limited to
Europe.
Overnight, figures showed that Japan's economy contracted
sharply in the second quarter after a sales-tax increase in April
caused household spending to tumble. This, economists said, could
pressure the government to take additional stimulus measures.
The yen, however, showed a muted reaction with some saying that
the market had largely been anticipating weak numbers. Strategists
at Rabobank commented in a note that the figures were "about as bad
as expected."
Elsewhere in currency markets, the ruble recorded marginal
losses against the dollar, to trade at 36.22, but Ukraine's hryvnia
continued its tumble, falling around 4.5% against the dollar
according to FactSet.
On Tuesday, the currency hit an all-time low against the dollar
as fighting in the country's eastern regions continued and foreign
exchange reserves fell.
In commodity markets, gold added 0.2% to $1,313.50 a troy ounce.
Brent crude climbed 0.2% to $104.13 a barrel.
Write to Josie Cox at josie.cox@wsj.com and Tommy Stubbington at
tommy.stubbington@wsj.com