By Twesha Dikshit
May 5 (Reuters) – European shares edged higher on Tuesday, recouping slightly from a slump in the previous session, as investors assessed upbeat corporate earnings, though an escalation in U.S.-Iran tensions kept sentiment in check.
The pan-European STOXX 600 was up 0.4% at 608.13 points, as of 0818 GMT, after posting its biggest drop in a month on Monday. Major regional bourses were also trading higher, except London’s FTSE 100, which was down 0.9%.
A fragile truce between the U.S. and Iran was in question after the two nations launched new attacks as they wrestled for control of the Strait of Hormuz. Oil prices remained firmly above $110 a barrel.
Soaring oil prices have weighed on energy-dependent Europe, stoking inflation fears that have led to expectations of two to three rate hikes by the European Central Bank this year and dragged shares below pre-war levels.
“Corporate earnings have been relatively supportive. And at the end of the day, if companies are still making money then that’s going to keep the mood buoyant,” said Fiona Cincotta, senior market analyst at City Index.
“Even if there are concerns over rising oil prices, they don’t seem to be hitting equity markets as much as one might expect them to.”
The food and beverage sub-index gained 1%.
Anheuser-Busch InBev advanced 7% after the Belgian beer maker posted quarterly sales and profits well above forecast.
Shares of Hugo Boss rose 4.5% after the German fashion group reported quarterly operating profit above expectations.
The technology sub-index added 1.3%, while the automobile sub-index was up nearly 1%.
Financials remained a drag after HSBC shed 0.6% on reporting an unexpected $400-million loss linked to a fraud case in Britain that resulted in first-quarter profit below estimates.
Shares of UniCredit rose 3.2% after the Italian lender posted its highest quarterly profit on record and raised full-year forecast. UniCredit has also launched a takeover offer for Commerzbank despite strong German opposition.
Among other movers, Rheinmetall was up 2.5%. The German defence group’s preliminary results showed quarterly revenue below analyst expectations.
Intertek soared 7% after Swedish private equity firm EQT AB raised its bid to buy the product-testing company for about 8.93 billion pounds ($12 billion).
(Reporting by Twesha Dikshit; Editing by Sherry Jacob-Phillips)
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