French luxury group Kering hit a record high on Wednesday after reporting strong sales and European shares hovered near a 20-month peak, supported by a wave of earnings results that largely outperformed market expectations.
The pan-European benchmark gained 0.1 per cent in early trading as luxury stocks and financials underpinned gains, though some heavy fallers including French stationary maker Bic and fertilizer producer Yara checked further increases.
France's CAC 40 was little changed, just off the nine-year highs hit earlier this week after the investor-friendly centrist Emmanuel Macron progressed to the second round of the French presidential election.
“We have had 25 per cent of companies reporting, and a majority of those have beaten estimates,” said Emmanuel Cau, global equity strategist at JP Morgan.
“Pretty much every single Eurozone data point out has surprised to the upside, and this is driving upgrades.”
Kering was the top gainer, up 10 per cent after surprisingly strong first quarter sales at Gucci and Yves Saint Laurent helped the company beat market forecasts.
“We expect the Gucci turnaround to continue for at least another quarter as the brand momentum continues,” said Bernstein luxury analyst Mario Ortelli.
Other luxury names across Europe rose on Kering's momentum, with Moncler and Salvatore Ferragamo top of Italy's blue-chips, and LVMH notching up another record high, up 1.7 per cent.
Logitech also soared 7.9 per cent, hitting a near nine-year high, after posting a 52 per cent increase in profit and 15 per cent rise in sales for its fourth quarter, surpassing forecasts.
Fallers were led by Bic, which plunged 10 per cent to a more than two-year low, after its first-quarter net income and sales fell on weak US demand.
Fertiliser producer Yara fell 5.5 percent in healthy volumes, after it missed first-quarter forecasts as margins were squeezed by rising natural gas prices.
French software solutions company Dassault Systemes fell 5.5 per cent, set for its worst day in six months, after it announced single-digit growth in new licences in its first quarter.
Analysts at Baader Helvea said this disappointed after double-digit growth in new licenses drove the shares higher at the end of 2016.
Credit Suisse, which kicked off much-anticipated results for European banks with a beat and plans for a $4 billion cash call, rose 2.3 per cent, outperforming the regional banking index.
Regional banks supported European gains after Standard Chartered also posted robust results with profit doubling in Q1.
Overall, first-quarter earnings for STOXX 600 companies were expected to rise 5.5 per cent, according to Thomson Reuters I/B/E/S data. Revenues are expected to increase 5.7 per cent.
That compares to the 11.4 per cent earnings growth expected for top US companies.