(Bloomberg) -- European equities advanced after tumbling to a 22-month low as investors turned their attention to positive earnings’ surprises.
The Stoxx Europe 600 Index added 0.4 percent after sinking to a December 2016 low on Tuesday. LVMH climbed 3.2 percent after Kering’s Gucci beat estimates in the third quarter and rose 12 percent. Nordea Bank AB dropped 2.7 percent after third-quarter net missed estimates. Oil’s decline weighed on European oil majors, including Royal Dutch Shell (LON:RDSa) Plc and Total SA (PA:TOTF).
European investors have been stuck between a rock and a hard place as earnings disappointments pile on top of the concerns about Italian budget negotiations. The region’s equities fell for five days straight through Tuesday, renewing worries that the bull market had been stifled by the rising U.S. interest rates.
“The reality is that incoming data on the world’s economy and its corporate sector is certainly not disastrous, but neither is it currently sufficiently strong to turn the tide on the recent surge in pessimism,” said William Hobbs, head of investment strategy at Barclays (LON:BARC) Investment Solutions in London. “We don’t think we are at a choke point for either the U.S. or indeed the global economy”