10-31-13 1:06 PM EDT | Email Article
 

By Sara Sjolin, MarketWatch

 

LONDON (MarketWatch) -- European stock markets moved mostly higher on Thursday, as upbeat earnings from Alcatel-Lucent SA and BNP Paribas SA offset weak euro-zone unemployment data and concerns over the timing of the U.S. Federal Reserve's bond-buying taper.

 

The Stoxx Europe 600 index rose 0.5% to close at 322.37, bringing the monthly gain to 3.8%.

 

"You get the sense at the moment that investors don't really want to sell and don't really want to buy, so we're getting a lot of choppy movement," said Peter Dixon, strategist at Commerzbank in London. "It's a volatile environment and it's hard to make a compelling case for equities. Price-to-earnings ratios are not stretched, but reasonably high."

 

Among companies that helped push the pan-European index into positive territory, shares of Alcatel-Lucent SA (ALU) jumped 19% after the telecom-equipment maker posted a narrower loss in the third quarter, helped by a rise in revenue.

 

BNP Paribas SA climbed 3.4% after the bank reported a 2.4% rise in third quarter profit.

 

Other banks also rose, with shares of Banco Santander SA (SAN) up 1.8% and Soci��t�� G��n��rale SA 2.6% higher.

 

Fed statement

 

More broadly, investors looked to the U.S., where the Federal Reserve concluded a two-day meeting on Wednesday by making no changes to its interest rates or quantitative-easing program. The statement, issued after European markets had closed, showed few changes from the September statement. Market participants had expected the Fed to be more bearish on the economy, and thus more dovish on monetary policy.

 

"A run of weak economic data and the fallout from the U.S. shutdown had markets cemented to the view that tapering wouldn't begin until March next year at the earliest," said Jonathan Sudaria, dealer at London Capital Group, in a note.

 

"The lack of symmetry between how the Fed sees the economy and how markets have interpreted the data has traders concerned that they've pushed out the timeline for tapering too far. With the foundations of the recent rally built on the idea that tapering was continually being kicked further and further down the road, bulls could be in for a rude awakening," he added.

 

U.S. stocks traded mostly higher on Wall Street. Asia markets closed lower.

 

Europe data

 

In Europe, figures from Eurostat showed the unemployment rate in the euro area remained at a record 12.2% in September, above expectations of a 12% reading. The data for August were revised up to 12.2% from the previously recorded 12%.

 

"Overall, the data reinforce the picture of a still-fractured labor market in the euro area, which will continue to serve as a downside risk to domestic demand as well as the wider recovery. We still expect that the slow recovery, coupled with important labor-market-reform efforts, will start to bear fruit," said Timo del Carpio, European economist at RBC Capital Markets.

 

Meanwhile, inflation for the euro zone fell to the lowest level in almost four years in October, raising pressure on the European Central Bank to ease the money supply and support the region's fragile economy at its rate decision next week.

 

Europe movers

 

Among country-specific indexes, the U.K.'s FTSE 100 index broke a five-day winning streak, down 0.7% at 6,731.43. On the month, the index climbed 4.2%.

 

Shares of Royal Dutch Shell PLC (RDSB) dropped 5.2% in London after the oil major reported a 31% decline in third-quarter profit, largely because of weak refining-margins and increased exploration-and-production expenses.

 

On a more-upbeat note in the energy sector, BG Group PLC gained 2.3% after the oil-and-gas company reported adjusted earnings ahead of expectations.

 

BT Group PLC (BT) added 2% in London after posting a rise in second-quarter profit, benefiting from the early impact of its new sports channels.

 

Shares of Technip SA slumped 10% in Paris after the oil-services group amended its full-year revenue targets to reflect lower expectations for revenue from subsea activities and a faster pace for revenue from onshore and offshore businesses.

 

France's CAC 40 index rose 0.6% to 4,299.89 supported by the banks, sending the benchmark 3.8% higher for the month.

 

Germany's DAX 30 index climbed 0.3% to 9,033.92, marking yet another an all-time closing high. The index climbed 5.1% on the month.

 

Outside the major indexes, Novo Nordisk AS (NVO) slid 7.4% after the insulin maker reported third-quarter earnings slightly below expectations, and made downgrades to its guidance for sales and operating profit.

 

Anheuser-Busch InBev NV (AHBIY) climbed 2.8% after the brewer reported a 20% rise in third-quarter profit.

 

Subscribe to WSJ: http://online.wsj.com?mod=djnwires


(END) Dow Jones Newswires

October 31, 2013 13:06 ET (17:06 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.
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