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European stocks rebounded on Wednesday on the heels of a sharp selloff driven by slumping oil prices, with well-received results from Roche Holding and STMicroelectronics helping to shore up markets.
The Stoxx Europe 600 index SXXP, +1.27% rose 1% to 327.31, after tumbling 3.4% on Tuesday, marking its biggest one-day percentage decline since March 23, according to Dow Jones Market Data. The German DAX DAX, +1.23% climbed 1%, the FTSE UKX, +1.38% gained 0.9% and the French CAC 40 index PX1, +0.93% gained 0.4%.
U.S. stock futures also rose, after the weakest finish in roughly two weeks on Tuesday. Dow industrials futures YM00, +1.23% climbed over 200 points.
Tumbling oil prices, driven by too much supply, too little storage and weak demand due to the coronavirus outbreak, have driven a global equity slump this week. U.S. oil prices CLM20, -5.70% appeared to stabilize on Wednesday, but international benchmark Brent crude BRNM20, -9.26% fell 12%, taking it to its lowest level since 1999.
Oil woes were overshadowed by upbeat earnings in the all-important pharmaceutical sector, with shares of market heavyweight Roche ROG, +1.66% up 0.9% after the Swiss drugmaker reported a rise in first-quarter sales and backed its 2002 view.
Shares of STMicroelectronics STM, +5.70% gained 2% after the European chip maker reported higher net profit and revenue for the first quarter.
Leading gains on the Stoxx 600 were shares of Akzo Nobel AKZA, +8.94% AKZA, +8.94% AKZA, +8.94% climbing 7% after the Dutch paints and coatings company reported a first-quarter revenue fall due to the pandemic, and warned of a significant hit in the second quarter. However, the company said it expects “positive momentum” to return once markets normalize.
“Akzo’s significantly repaired balance sheet at 1.2x [net-debt] to Ebitda [earnings before interest, taxes, depreciation, and amortization] provides resilience in this turbulent time. Further, the demand is expected to return post lockdowns given the resilient nature supported by raw mat tailwinds,” said a team of Citi analysts led by Mubasher Chaudhry, in a note to clients.
Shares of CRH CRG, +7.01% rose over 5% after the Irish building-materials supplier said same-store sales rose 3% in the first quarter and it will pay a dividend, but has postponed buybacks and is making moves to conserve cash, including cutting senior management and board pay.
