On Wednesday, European shares came close to seven-week highs, thanks to a series of strong earnings results from companies.
This included Smurfit Kappa from Britain and Russian-exposed lending company UniCredit, which helped give some comfort in an uncertain and bleak environment.
The pan-European STOXX 600 index rose 0.5% for the day, with a 16.2% rise in the shares of French IT consulting firm, Atos taking it to the top, after it was able to secure funding for a turnaround plan.
There was a 6.8% gain in UniCredit after the lender raised its outlook for 2022 and also took its proposed share buyback forward, which had been put on hold earlier.
This allowed the MIB index in Italy to outperform most of its peers, as it was able to record gains of 1.5% for the day.
Strong growth in ad sales by Google parent Alphabet Inc. and an upbeat outlook from Microsoft overnight also gave sentiment a boost.
According to analysts, the valuations of companies also had most of the disappointment in earnings already priced in.
Analysts said that markets had already been prepared for some disappointment and now they were assessing every stock individually, against the concerns of central bank tightening for battling inflation, European gas crunch worries, and growth.
There is a 23.1% increase expected in the second-quarter earnings of companies that are part of the STOXX 600 index.
About 35% of the companies have already posted their results so far and almost 60% of them have managed to beat expectations.
The energy standoff between Europe and Russia escalated, as less gas was delivered to the former by the latter.
This will make it harder for the European Union, not to mention costlier, to build reserves for storage ahead of the upcoming winter season.
The US Federal Reserve’s monetary policy meeting was also a focal point, as markets were looking forward to an announcement of a 75 basis points increase in the interest rate.
There was a 3% gain in the travel and leisure sector, as positive comments from Wizz Air gave it a boost. A 10.4% jump was seen in the shares of the low-cost airline.
This was because its revenue for the quarter almost quadrupled and it said that higher ticket prices were because of the demand for travel.
There was also a 13.8% increase in Worldline, as the French payment firm posted upbeat results for the first half of the year.
A 5.5% advancement was also seen in Smurfit Kappa, after the largest paper packaging producer in Europe reported that core profit for the first half jumped 50% and it also boosted its interim dividend.
A 0.7% fall was recorded in Miner Rio Tinto, after its profit for the first half declined, while a 5.1% drop was also seen in Adidas.
This was after the company cut its earnings target for 2022 and cited the pandemic restrictions in China as the reason for its slower-than-expected recovery.