By Sara Sjolin and Carla Mozee, MarketWatch
German economic sentiment weakens
European stock markets finished higher Tuesday, as investors
assessed corporate earnings and appeared to take in stride Greece's
struggle with getting access to its next portion of bailout
money.
The Stoxx Europe 600 index climbed 0.6% to 409.12, with only the
oil and gas group losing ground.
Among Tuesday's best performers was ARM Holdings PLC (ARMHY).
Shares jumped 3.9%, marking their best session since December,
after the chip designer reported a 36% rise in first-quarter net
profit
(http://www.marketwatch.com/story/arms-profit-lifted-by-strong-smartphone-demand-2015-04-21).
On Monday
(http://www.marketwatch.com/story/european-stocks-buoyed-by-china-stimulus-move-but-greek-worries-persist-2015-04-20),
the Stoxx 600 climbed 0.8%, boosted in part by China's move to
stimulate its economy.
Greek woes: Greece needs to agree on a range of economic
overhauls with its lenders in order for the cash-strapped country
to receive its next tranche of bailout funds. On Tuesday, Jeroen
Dijsselbloem, head of Eurogroup, a group of eurozone finance
ministers, said he foresees the two sides reaching a deal in the
coming weeks, according to a Reuters report.
European equities had come off sessions highs earlier Tuesday
following a Bloomberg report the European Central Bank is looking
at measures to rein in support
(http://www.marketwatch.com/story/ecb-looking-at-reining-in-support-for-greek-banks-reports-2015-04-21)
for Greek banks under its emergency liquidity assistance. The
measures include a proposal to raise the haircuts banks take on the
collateral when they borrow from the Bank of Greece.
On Monday, Athens ordered public entities including state-owned
companies and public pension funds to transfer cash reserves to the
central bank
(http://www.marketwatch.com/story/greece-orders-public-bodies-to-transfer-cash-to-central-bank-2015-04-20),
a move that comes as Greece scrambles to find money it needs to
service debt.
The Eurogroup will meet on Friday to discuss the Greek bailout,
but few have expected a major breakthrough in talks. A top EU
official has given Greece a deadline of the Eurogroup meeting on
May 11
(http://www.marketwatch.com/story/top-eu-official-to-greece-agree-to-reform-by-may-11-or-else-2015-04-17)
to agree on a reform plan or potentially face a default.
The yield on 10-year Greek government bonds climbed 50 basis
points on Tuesday to 13.45%, according to electronic trading
platform Tradeweb. That's the highest in more than two years.
"All noises ahead of the meeting suggest there are problems
coming to an agreement and all the while Greek bond yields continue
to rise. This shows there is stress in the [financial] system and
concerns in the bond market," said Richard Perry, market analyst at
Hantec Markets.
Greece's Athex Composite index fell 3.3% to 704.74 on
Tuesday.
Other markets: Germany's DAX 30 index rose 0.4% to 11,939.58,
coming off its intraday high after the ZEW indicator of German
economic sentiment dropped in April
(http://www.marketwatch.com/story/zew-german-economic-sentiment-drops-unexpectedly-2015-04-21),
marking the first decline in six months. The index dropped to 53.3
from 54.8 in March.
However, when assessing the current situation the survey
respondents were much more optimistic: the corresponding indicator
leapt to 70.2 in April from 55.1 in March.
"Germany is doing fine. In fact, it may now be doing so well
that some observers believe it can't get much better. That seems to
be the message from German ZEW investor confidence," Holger
Schmieding, chief economist at Berenberg, wrote in a note.
France's CAC 40 index gained 0.1% to 5,192.64, while the U.K.'s
FTSE 100 index ended higher by 0.2% at 7,062.93
(http://www.marketwatch.com/storyno-meta-for-guid).
Earnings: SAP SE put on 2.3% after the software company reported
a 22% rise in first-quarter revenue
(http://www.marketwatch.com/story/sap-profit-down-23-after-cloud-move-2015-04-21)
(http://www.marketwatch.com/story/sap-profit-down-23-after-cloud-move-2015-04-21)
and a 23% fall in profit.
Shares of Actelion Ltd. rose 5.2%. The Swiss biotech firm
reported a 25% increase in first-quarter profit and raised
full-year core-earnings guidance
(http://www.marketwatch.com/story/actelion-lifts-full-year-guidance-as-profit-up-25-2015-04-21).
Shares of Associated British Foods PLC fell 5.3% after company,
which owns retailer Primark and sugar operations, said it now
expects a modest decline
(http://www.marketwatch.com/story/associated-british-foods-pretax-profit-drops-4-2015-04-21)
in adjusted per-share earnings for the full year. AB Foods had
previously expected a marginal decline in adjusted earnings.
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