Europe’s main stock benchmark closed a touch higher on Thursday, with banks providing support after a dose of upbeat results and a U.K. court ruling viewed as favorable for the country’s financial sector.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +1.84% edged up just 0.01 point to end at 331.56, breaking an eight-session losing streak—its longest since October 2014. The index couldn’t hold a more sizable intraday gain, having traded as high as 334.05 during the session, according to FactSet data.
Bank joy: Banking shares moved higher in the wake of encouraging quarterly reports from Société Générale SA and ING Groep NV, plus a ruling that the British government can’t trigger the Brexit process without signoff from parliament.
SocGen /zigman2/quotes/206663756/delayed FR:GLE +1.19% jumped 5.5% after the French lender posted better-than-expected third-quarter profit. Its results were buoyed by a strong performance from its investment banking business, which offset a decline in retail banking revenue.
ING /zigman2/quotes/203351007/delayed NL:INGA +1.99% /zigman2/quotes/203566071/composite ING +2.12% rose 2.3% after a 27% rise in third-quarter profit. The Dutch banking giant said it benefited from growth in loans and deposits.
British banks gained as the court decision somewhat allayed fears the country is heading for a so-called hard Brexit that could hurt the financial industry. Analysts said there might now be a softening in talks around leaving the European Union, helping to potentially keep the U.K. in the EU’s single market even after an exit from the bloc.
Shares of Royal Bank of Scotland Group finished up 6.1%, Barclays PLC /zigman2/quotes/208409333/delayed UK:BARC +1.09% /zigman2/quotes/206581728/composite BCS +1.81% rose 1.8%, and Lloyds Banking Group PLC /zigman2/quotes/202285510/delayed UK:LLOY +0.01% /zigman2/quotes/200709414/composite LYG +0.47% was 1.6% higher.
Most other banks also stepped higher, sending the Stoxx Europe 600 banks index /zigman2/quotes/210599339/delayed XX:SX7P +1.00% up 0.8%.
Credit Suisse Group AG /zigman2/quotes/205269278/delayed CH:CSGN +1.94% /zigman2/quotes/202835784/composite CS +1.73% , however, bucked the positive trend in the sector, falling 7.1%. The loss came as the Swiss bank reported a steep drop in profit, but beat analyst forecasts.
The Fed and Trump factors: The Stoxx Europe 600 initially traded lower Thursday as investors reacted to the U.S. Federal Reserve’s decision late Wednesday to keep rates on hold and followed developments in the presidential campaign.
Fears that Republican candidate Donald Trump will win the election next week have taken a toll on global stock markets this week, analysts said. He is viewed as likely to inject more uncertainty into world affairs, and big investors generally don’t like unpredictability.
“Markets have reacted with cautiousness to political uncertainty that is seemingly flying in on multiple fronts. Investors are not panicking but have been paralyzed into inaction over the endless possible outcomes of the US election and Brexit,” said Jasper Lawler, a CMC Markets analyst, in a note.
Other movers: Shares of Air France-KLM SA /zigman2/quotes/205396176/delayed FR:AF +0.90% added 6.1% after the airline said profit rose in the first quarter as lower fuel costs offset pressure from terrorism fears and losses from strikes.
Inmarsat PLC rallied 10%. The satellite-services provider backed its full-year revenue outlook after earnings and sales rose in the third quarter.
BOE’s Super Thursday: The Bank of England was busy on its “Super Thursday,” keeping interest rates unchanged as expected, while also playing down the chances of a further cut in rates.
The BOE’s signals, combined with U.K. court ruling, helped to send to the pound /zigman2/quotes/210561263/realtime/sampled GBPUSD -0.3303% leaping to $1.2430, up from $1.2302 late Wednesday in New York.
National indexes: The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +1.62% fell 0.8% to end at 6,790.51, weighed down by sterling’s strength. A burlier pound tends to weigh on the FTSE because the index’s many export-dependent companies that benefit from a weaker currency.
France’s CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 +1.57% edged down 0.1% to close at 4,411.68, and Germany’s DAX 30 /zigman2/quotes/210597999/delayed DX:DAX +1.64% dropped 0.4% to 10,325.88.