By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stock markets were largely
shifting south, giving up the bulk of earlier gains driven by
positive reaction to results from UBS AG, Deutsche Bank AG and
BP.
The Stoxx Europe 600 index , set to end the month with a
moderate gain of just over 1.5%, erased an opening gain of 0.4% to
trade flat at 297.48. The index closed the prior session with a
0.5% gain as investors welcomed a new government in Italy.
Investors were also drawing some cheer from a record close for
the Standard & Poor's 500 index (SPX). The higher close on Wall
Street was driven by upbeat corporate results.
Earnings put banks in a positive spotlight. Shares of UBS (UBS)
rose 5% after the Swiss investment bank nearly doubled expectations
with a profit of 988 million Swiss francs, driven by its wealth
management and investment bank units.
Shares of Germany's Deutsche Bank AG (DB) rose nearly 6% after
reporting results after the close of markets the prior day. The
financial institution said its first-quarter profit rose to 1.7
billion euros, or 1.71 euros per share, which exceeded forecasts.
The bank also announced capital-raising measures of around 2.8
billion euros.
Analysts at J.P. Morgan Cazenove upgraded the investment bank to
overweight from neutral, applauding the fact the bank is "finally
starting to address its capital issues." Nomura analysts lifted
Deutsche Bank to neutral from reduce, saying stronger capital will
"end recent underperformance".
Helped by its heavyweight bank, the German DAX 30 index
outperformed the rest of Europe with a gain of 0.6% to
7,920.27.
On the downside, shares of Anheuser-Busch Inbev NV (AHBIY) fell
nearly 3% after the beer group said first-quarter volumes in its
key Brazil and U.S. markets fell, as it posted sales that missed
expectations.
In London, BP PLC (BP) gained over 3% after the oil major
reported a more than three-fold rise in profit for the first
quarter, lifted by profits from the sale of its Russian joint
venture TNK-BP. But the FTSE 100 index remained flat at
6,464.39.
The FTSE was held back by a more than 2% drop for Centrica PLC ,
which was cut to underperform from neutral at Credit Suisse. Shares
of Unilever PLC fell nearly 1%. The group said it will increase its
stake in its India unit, Hindustan Unilever, from 52.48% to
75%.
Among other indices, the French CAC 40 index fell 0.1% to
3,864.31.
The FTSE MIB Italy index fell 0.6% to 16,823.96, giving back a
chunk of the 2.2% it gained the prior session on political
optimism. In an interview with Reuters, industry minister Flavio
Zanonato said the new government wants to renegotiate its stability
pact with the European Union.
New Prime Minister Enrico Letta won a confidence vote a day
prior after promising his government will work to change the pace
of Europe's austerity policies, and try to lift his own country out
of recession, according to media reports.
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