LONDON (Reuters) - European shares edged higher on Thursday as corporate earnings boosted consumer stocks, although worries over China-U.S. trade tensions and new sanctions against Russia kept gains muted.
While worries over an escalation in the trade dispute between the U.S. and China dampened market sentiment earlier on, a strong batch of earnings among consumer discretionary stocks helped the STOXX 600 index reverse earlier losses and end the session 0.1 percent higher.
German sportswear firm Adidas (ADSGn.DE) soared more than 9 percent after it reported a better-than-expected second quarter, while cinema operator Cineworld (CINE.L) jumped 10.7 percent after posting a rise in half-year revenue.
Cineworld’s results were lifted by blockbusters such as “Avengers: Infinity War” and “Black Panther”.
However, individual stocks were not immune to geopolitics. While Austria’s Raiffeisen Bank RBVI.VI surpassed expectations in the second quarter, its shares fell 6 percent as new U.S. sanctions against Russia put pressure on companies with exposure to the country.
Raiffeisen said it was too early at this stage to say who would be affected by the sanctions. The banking sector .SX7P fell 0.1 percent.
CMC Markets analyst Michael Hewson said in early trading that “concerns about new U.S. sanctions on Russia”, alongside trade war fears, “may well also limit the upside for European markets today”.
Worries over the impact of U.S.-China tariffs on global economic growth have weighed on markets this summer.
Deutsche Bank’s European equity strategists, however, said that they would need to see tangible signs of slowing growth for trade tensions to have a meaningful impact on European equities.
They added that they saw “little impact” for European equities over the next six months.
Elsewhere stocks trading ex-dividend and a fall in holiday firm TUI’s (TUIT.L) shares saw the UK’s FTSE end the session down 0.5 percent.
TUI was down 2.5 percent after it blamed a summer heatwave for keeping Europeans at home instead of traveling.
“There’s a chance the FTSE’s losses would have been even greater on Thursday if the pound didn’t get off to another awful start”, said Spreadex’s Connor Campbell.
The market analyst added: “the fears of a ‘no deal’ Brexit have really gathered steam in the last few sessions”.
A weak pound typically gives an accounting boost to blue-chip UK companies, which sell a large proportion of their products or services in foreign currencies.
Reporting by Julien Ponthus and Kit Rees, Editing by Mark Potter and Hugh Lawson
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