Volkswagen shares enjoyed their best session in five months on Thursday as the German car maker shrugged off a worsening European car market to post a surprise increase in net profits.
Shares in the company rallied 7.8 per cent to €124.55 ($162.32), as revenues rose by a quarter to €47.3-billion in its first-quarter results.
Volkswagen’s gains were not mirrored across the sector, however, as Fiat and Renault slumped after poor European sales weighed on their results.
Shares in Renault fell after the French car maker reported an 8.6-per-cent decline in sales along with rising inventory costs.
Erich Hauser, analyst at Credit Suisse, said: “If [a]recovery in demand should fail to materialize, then larger production cuts will become necessary. In this environment we think it will be difficult for Renault to break even and avoid negative free cash flow.”
The French auto maker closed down 2.1 per cent at €34.60.
Meanwhile, Fiat fell 5.1 per cent to €3.74 as improving results at its U.S. unit, Chrysler, were not enough to allay investor concern surrounding the Italian car maker’s poor performance in Europe, where revenue fell 13.1 per cent.
On the wider market, the FTSE Eurofirst 300 edged up 0.2 per cent to 1,044.31, with corporate results driving the biggest gains and losses.
In Frankfurt, Deutsche Bank dropped 2.8 per cent to €33.20 as one-off charges dented its first-quarter results. Net profits at the German lender fell by a third to €1.4-billion, below analyst forecasts.
Jeremy Sigee, an analyst at Barclays, said: “Investors are somewhat on hold right now with Deutsche Bank shares, waiting for the new co-CEOs to pronounce on capital and strategy.”
The Xetra Dax itself added 0.5 per cent to 6,739.90.
In Madrid, losses for Santander weighed on the Ibex 35.
Spain’s largest bank by market capitalization fell 3.4 per cent to €4.75 after its first-quarter results disappointed. Net profit at the Spanish lender fell by a quarter to €1.6-billion thanks to higher loan provisions.
The Ibex 35 fell 1.3 per cent to 7,027.1.
In Paris, PPR, the French luxury and retail group, jumped 4.9 per cent to €125.50 after its first-quarter results. The stock was supported by bumper sales in its luxury goods division, which reported a 17.8-per-cent increase in like-for-like sales.
Melanie Flouquet, analyst at JPMorgan, said: “The weak performance at Puma was more than offset by better performances everywhere else. [Organic sales growth at]the all-important Gucci brand came in up 12 per cent.”
The CAC 40 index slipped 0.1 per cent to 3,229.32.
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