By Twesha Dikshit
(Reuters) -European shares ticked higher on Thursday, as investors weighed mixed earnings reports and the impact from higher U.S. tariffs on a dozen of its trading partners that are expected to weigh on global growth and rekindle inflation.
The pan-European STOXX 600 index rose 0.6%, as of 0855 GMT, with most major regional bourses trading higher.
Britain’s blue-chip FTSE 100, however, dipped 0.3% ahead of a Bank of England meeting where policymakers are widely expected to cut interest rates.
U.S. President Donald Trump’s higher tariffs kicked in on Thursday, including a 39% rate on Switzerland. Swiss President Karin Keller-Sutter left Washington on Wednesday after failing to meet with Trump or any top trade officials, a source told Reuters.
Trump also said the United States will impose a tariff of about 100% on imports of semiconductors but offered up a big exemption – it will not apply to companies that are manufacturing in the U.S. or have committed to do so.
European tech stocks, particularly those of chipmakers, climbed on relief that there will be no charge on companies such as Apple that has committed to build in the United States.
European chipmakers BE Semiconductor, ASML Holding and SAP were all up over 2%.
Broad hopes that tech companies will be spared from Trump’s big tariffs helped offset weak economic data and some earnings disappointments.
German industrial output fell in June to its lowest level since the pandemic, with exports rising more than expected amid weak foreign demand and increased competition from China.
In earnings, Rheinmetall was among top laggards on the index, falling 5.2%, after the German defence company missed second-quarter sales expectations partially due to a delay in German defence contracts being awarded.
On the flip side, Maersk rose 2.5% after the shipping group raised its full-year profit outlook on global demand for ocean container freight.
“I think it’s safe to say the impact on profits in this quarter has been negative but not as bad as expected,” said Daniel Morris, chief market strategist at BNP Paribas Asset Management.
“One of the reasons is you’d already priced in that impact on profits and it’s turned out to be a little bit better than you thought.”
Of the 198 companies in the STOXX 600 that reported earnings through Tuesday, 53% exceeded analysts’ estimates, as per data compiled by LSEG. In a typical quarter, 54% beat forecasts.
Telecommunication stocks were under pressure after Freenet AG and DT Telekom fell 5.3% and 3.6%, respectively, after their quarterly results.
Austria’s Raiffeisen Bank International jumped to the top of STOXX 600, adding 10.3% after a Russian court lifted a temporary freeze of the bank’s Russian unit shares.
InterContinental Hotels Group rose 6% after posting a strong half-year revenue and maintaining full-year targets.
Merck KGaA fell 1.4% after the German drugmaker narrowed its guidance range for organic sales and posting a lower second-quarter adjusted EBITDA due to a weaker dollar.
(Reporting by Twesha Dikshit and Sruthi Shankar in Bengaluru; Editing by Rashmi Aich and Janane Venkatraman)
