By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks settled higher Thursday,
with Barclays PLC pacing a rise in banking shares as the firm
planned to outline its growth strategy, but shares of Rémy
Cointreau SA struggled following the cognac maker's profit
warning.
The Stoxx Europe 600 recovered for a gain of 0.5% to 332.43,
following an upswing for U.S. stock futures as weekly jobless
claims came in ahead of expectations. The index finished the
holiday-shortened week with a 1.1% advance.
Bank stocks rose, with Barclays bouncing up 3.8% as the lender,
in an internal memo, said it would make changes at its investment
bank as it becomes a smaller, more-focused entity to adapt to
tougher regulatory and economic conditions. Barclays said in a
statement it plans to update the market on May 6.
In the banking group, shares of Deutsche Bank rose 1.6%, Société
Générale picked up 1.3% and BNP Paribas gained 0.4%.
"With ambitious targets for cost reduction/control for all the
U.K. banks, progress vs. targets is key; we expect this to be a
challenge for all the U.K. banks other than Lloyds [Banking Group
]," said J.P. Morgan analysts Chris Manners and Fiona Simpson in a
preview this week of first-quarter results for the sector.
The pan-European index also turned higher Thursday after U.S.
financial industry heavyweight Goldman Sachs Group Inc. (GS) posted
above-anticipated earnings of $4.02 a share and Morgan Stanley's
(MS) adjusted earnings of 68 cents a share outstripped expectations
of 59 cents a share.
European equity markets had been lower in part as investors kept
tabs on developments from diplomatic talks between Ukraine, Russia,
the European Union and the U.S. as they discuss Ukraine's growing
political crisis and tensions with Russia. On Thursday, three
pro-Russian protesters were killed and 13 wounded after a clash
with Ukrainian authorities at a military installation in the
southeastern city of Mariupol.
Russian President Vladimir Putin ahead of the talks in Geneva
accused the Kiev government of committing a "serious crime" for
sending troops to eastern Ukraine. The talks were held ahead of a
four-day weekend in European markets for Good Friday and for Monday
following Easter Sunday.
Among those pacing decliners on the Stoxx 600 were Rémy
Cointreau SA and Diageo PLC as the liquor makers posted sales
declines. Rémy fell 3.3% after warning that annual operating profit
could fall between 35% and 40%. Fourth-quarter sales fell nearly
19%, with contraction in the Rémy Martin brand largely because of
"extravagant measures taken by the Chinese government," said Rémy,
referring to China's order to officials to cut their lavish
spending.
"This austerity policy is not going to decline. On the contrary,
the government is stepping [up] its actions in this area," Rémy
said during its quarterly conference call.
Shares of Britain's Diageo , whose brands include Smirnoff vodka
and Guinness stout, fell 3.7% after the company said its
third-quarter sales fell 1.3% on weakness in currencies and in
emerging markets.
Also, shares of SAP AG pulled back 1.2% after the company's
traditional business with software for installation on computers
was hurt by currency impact. Overall profit and sales at SAP in the
first quarter, however, rose.
In London, the FTSE 100 picked up 0.6% at 6,625.25 and Germany's
DAX 30 rose 1% to 9,409.71. France's CAC 40 gained 0.6% to close at
4,431.8, with a 1.3% increase for shares of Publicis Groupe SA as
the advertising and public relations firm logged first-quarter
sales growth.
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