Earnings help STOXX steady as banks bounce back

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EARNINGS HELP STOXX STEADY AS BANKS BOUNCE BACK (0851 GMT)

European shares managed to shake off opening losses on Thursday with a string of well-received earnings updates, a bounce back in banking stocks and some fresh M&A action helping the STOXX 600 move above parity by mid morning.

The pan-European equity benchmark index was last up 0.2%. following two days of declines. Banks rose 0.8% after consensus-beating numbers from Barclays, Deutsche Bank and BBVA which led higher a broad bounce in the sector.

Top STOXX gainer was software firm SimCorp, up 39% after German exchange operator Deutsche Boerse made a 3.9 billion euro takeover offer for Danish company. Deutsche Boerse fell 6% in heavy trading volumes that made it the biggest single-stock drag to the STOXX.

Among top gainers were hydrogen solutions provider NEL , hearing aid maker GN Store and outdoor products maker Thule following results. STMicro was a big faller even as the chipmaker posted solid results. One trader cited demand concerns.

(Danilo Masoni)

EUROPE SEEN SOFTER ON ANOTHER BIG EARNINGS DAY (0625 GMT)

European stocks were set to fall slightly on Thursday as worries over a slowing U.S. economy and jitters over First Republic Bank overshadowed a string of strong tech earnings. The latest is Facebook owner Meta Platforms, which returned to positive sales growth, pushing its shares sharply higher.

In Europe it's another heavy day for earnings releases. In the closely watched banking sector, Deutsche Bank reported a better-than-expected 9% rise in Q1 profit as higher interest rates offset a slump in investment bank revenues.

Strong numbers also from BBVA, which said Q1 net profit rose 39.4% thanks to a solid performance in its main market in Mexico. Futures on euro zone banks however were last down 0.15%.

The region-wide EuroSTOXX50 futures fell 0.2% and so did FTSE 100 contracts. Derivatives on the Nasdaq rose 0.8%, pointing to another strong session for U.S. tech.

Elsewhere, Unilever smashed quarterly sales forecasts as another big rise in prices triggered only a small dip in volumes, while chipmaker STMicroelectronics reported better-than-expected first-quarter results.

Among other top earnings releases were those from AstraZeneca, BASF, WPP and Air Liquide, just to name a few.

(Danilo Masoni)

US RECESSION WORRIES WEIGH IN ASIA (0556 GMT)

Europe wakes up to more weakness in equities after stock markets across Asia took cues from Wednesday's slump on Wall Street.

Fears that the US could slip into recession weighed broadly. But perhaps reassuringly, financials fared relatively better in markets including Hong Kong and Tokyo, suggesting little fear of widening contagion from First Republic's woes.

Technology shares in the region didn't benefit much from Microsoft's earnings boost though, which had buoyed the Nasdaq. The Hang Seng's tech sector, in particular, slumped more than 1%, with the mood soured by the U.S. Commerce Secretary's warning that Chinese cloud computing companies may pose a national security threat.

Meanwhile, the United States continued to cozy up to long-time regional allies South Korea and Japan.

The Yomiuri newspaper reported the trio are preparing to hold a summit on May 21 on the sidelines of the Group of Seven summit that Japan is hosting over that weekend.

Overnight, a meeting in Washington between President Joe Biden and South Korean leader Yoon Suk Yeol produced a pledge from the United States to give its East Asian partner more insight into its nuclear planning over any conflict with North Korea.

Away from geopolitics, the Bank of Japan began its first policy meeting with new governor Kazuo Ueda at the helm. While the consensus is for no change to ultra-easy stimulus settings on Friday, no one is willing to rule out another surprise like in December, when former governor Haruhiko Kuroda wrong-footed investors with a doubling of the 10-year bond yield band.

Thursday's economic data calendar from Europe is light fare with just a handful of Eurozone sentiment indexes, consumer and business sentiment readings for Italy, along with retail sales and the jobless rate in Spain.

The meatier indicator comes later, in the form of U.S. advance GDP for the first quarter, with 2% annualised growth expected.

The U.S. reporting season also continues apace, with some of the day's highlights to include Mastercard pre-open, Caterpillar during the day and Amazon and Intel after the bell.

Looming over everything though is the continued standoff in the US over extending the debt ceiling, as the bill passed by House Republicans overnight - including sweeping spending cuts - has already been called DOA by top Senate Democrat Chuck Schumer.

Key developments that could influence markets on Thursday:

-U.S. advance GDP

-U.S. earnings including

(Kevin Buckland)