World Crisis Online

Corporate earnings continued to push Europe’s equity markets higher on Thursday as investors seized on rising profits and bullish forecasts to drive stocks to fresh highs.

Cap Gemini, Europe’s largest computer consultancy, hit its highest since August 2008 after it reported expectation-beating earnings and said its growth had accelerated in its fourth quarter. It rose 5.6 per cent to €42.08.

Solvay, the Belgian chemical company, was at its highest since October 2008 after reporting higher demand and rising fourth-quarter operating profits. Its shares rose 3.9 per cent to €83.43.

Switzerland’s Nestlé, the world’s largest food producer, rose a more modest 0.9 per cent to SFr52.90 by midday after it reported sales growth that beat expectations and accelerated in the fourth quarter.

Although the company cautioned that input prices would rise in 2011, it said growth in emerging markets would offset much of the impact. Nestlé now joins Danone, the French dairy products group, in beating the general downbeat trend in the food sector this year.

Overall, the FTSE Eurofirst 300 index was up 0.1 per cent to 1,186.92.

Rising company profits have been a boon for equity markets in recent weeks and investors expected that trend to continue.

Of the asset managers surveyed by the Bank of America-Merrill Lynch Fund Managers survey, a net 68 per cent expected corporate profits to rise 10 per cent or more this year. In January’s survey, only a net 57 per cent of managers expected such a rise.

Weak performers on Thursday morning included EADS, the Franco-German aerospace group, which fell after Daimler, the German carmaker, offered to sell half its stake in EADS to the German government.

Shares in Paris-listed EADS fell 1.5 per cent to €21.90. Daimler fell 2.5 per cent to €52.21, continuing its losses from Wednesday, when it had reported disappointing fourth-quarter earnings.

German carmakers BMW and Volkswagen also fell. BMW was down 1.8 per cent to €60.53, with Volkswagen down 1.9 per cent to €120.70.