European shares gain amid upbeat hopes for earnings season

European shares rise, supported by upbeat outlook for Q3 earnings season.

European shares gain amid upbeat hopes for earnings season

European shares are higher Tuesday, as investor sentiment rebounds amid positive expectations for the upcoming earnings season. However, those gains have been tempered a little, as geopolitical tensions remain, including between Saudi Arabia and the US.

By 1205 BST, the EUROSTOXX 600 was up 0.30% and the EUROSTOXX 50 had gained 0.65%. Regional bourses were also positive. The German DAX was 0.40% in the green, the French CAC was 0.33% higher and the Spanish IBEX rose 1.00%.

Earnings expectations vs geopolitical tensions

According to Reuters, analyst expectations for this upcoming earnings season are upbeat. The view that third quarter earnings are likely to be broadly positive, has helped to improve the mood among investors following a string of losses across the indices.

However, while that brighter tone has been enough to push stocks mainly into the green, with autos helping to lead the way, despite emissions scandal related news, geopolitics worries are limiting those gains.

US-China trade tensions, Brexit negotiations and the Italian budget are all still on investors’ minds. The disappearance of a well-known journalist in Saudi Arabia, is also a major issue that’s working to limit sentiment improvements.

Saudi critic and US journalist Jamal Khashoggi, disappeared after entering the Saudi consulate in Istanbul on October 2. Saudi Arabia denies an allegation by Turkish authorities, that Khashoggi was murdered.

Stock movers

As European markets are higher Tuesday, there are some interesting stock movers.

Among them are Audi and Volkswagen shares, which are both trading in the green. Those gains come despite confirmation from luxury German car maker Audi, that it has been fined €800 million by the German prosecutor for diesel emissions violations.

Both Audi shares and Volkswagen shares were over 2% higher.

However, Volvo shares are 4.96% lower at SEK135.95, after warning that some of its engines could be exceeding emissions targets, due to a faulty component. The Swedish vehicle maker said it has launched a group-wide investigation.

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