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European shares hit 2-month closing high on strong earnings



European shares hit a two-month closing high on Thursday, with companies such as scents and flavours maker Symrise and consumer group Henkel hitting record highs after strong results and encouraging updates.

Henkel rose 5 percent as its results beat expectations and it lifted its guidance for its core profit margin. It was the top riser in Germany’s DAX, which gained 0.9 percent.

Symrise shares rose 5.5 percent after first-half sales surged 16 percent to 1.46 billion euros and the company said it was aiming to outperform the global flavour and fragrance market again in 2016.

“We remain positive on the (specialty chemicals) sector,” Northern Trust Capital Markets’ head of global equities, Gary Paulin, said. “The leaders in the sector still have a long tail of growth via consolidation ahead.”

Belgian financial group KBC rose 5.2 percent after reporting a year-on-year rise in net profit in the second quarter as loan and deposit volumes grew in most of its core markets and it kept costs low.

Also among the gainers, hearing aid and headset maker GN Store Nord surged 7.7 percent after posting strong second-quarter growth.

The second-quarter earnings season is drawing to a close in Europe. More than 80 percent of STOXX 600 companies have already reported results, of which 60 percent have beaten or met expectations, according to Thomson Reuters Datastream. The pan-European STOXX 600 index ended 0.8 percent firmer, the highest close since late May. The broader FTSEurofirst 300 index finished 0.9 percent stronger.

However, gains were capped by weakness in companies such as Old Mutual, down 3.8 percent, after it posted a profit drop of 9 percent, a worse-than-expected performance. “Adjusted operating profit came in well behind our and consensus’ estimates, driven by significantly weaker UK Wealth Management earnings than expected,” UBS analysts said in a note. Potash and salt miner K+S fell 5.6 percent after saying it expected operating profit to more than halve in 2016. –(Reuters)


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