Global Stocks Rise on Upbeat Earnings

Global stock markets were largely upbeat Thursday, after the U.S. Federal Reserve refrained from sending clear signals that it would raise interest rates in September, and with robust corporate earnings providing cause for greater optimism in Europe.

In early trade the Stoxx Europe 600 added 0.5%, building on gains made in the two previous sessions.

On Wednesday in the U.S., both the S&P 500 and the Dow Jones Industrial Average advanced 0.7%, and the Nasdaq Composite gained 0.4% after the statement from the Federal Reserve.

Many investors globally have been forecasting that the Fed could raise interest rates as early as September. Wednesday's statement, however, also flagged concerns that inflation remains too low.

That is making officials hesitant on the timing and inclined to raising rates very gradually after the first increase.

"The Fed did indicate that we are getting closer to the first rate hike […] however, it remains unclear whether the continued improvements in the labor market, the housing market and economic activity in general will be sufficient to hike at the next meeting in September," Rabobank strategist Philip Marey said.

Peter Chatwell, a rates strategist at Mizuho, said that September may still be on the table but that very much depends on the economic data over the next few weeks.

A first reading for second-quarter U.S. gross domestic product, the broadest sum of goods and services produced across the economy, is due Thursday.

In Europe, shares in Royal Bank of Scotland Group PLC rose sharply after the lender reported a rise in second-quarter net profit.

Shares in Royal Dutch Shell PLC rallied too. The oil major reported a sharp fall in second-quarter profit and said it would cut 6,500 jobs, illustrating the strain that sustained low oil prices are putting on large producers. Separately, Shell said it had agreed to sell a 33.2% stake in its Japanese oil refining unit, Showa Shell Sekiyu KK, to Japan's Idemitsu Kosan Co for ¥ 169 billion or $1.4 billion.

Nokia Oyj shares topped the pan European index, surging more than 8% shortly after the market open. The Finnish company reported a better-than-expected second-quarter profit boosted by significantly higher software sales, which offset challenging market conditions.

In Asia on Thursday, the Shanghai Composite closed down 3.2%. The Nikkei Stock Average ended the session up 1.1%, helped by a weaker yen.

Elsewhere in currency markets, the euro was around 0.2% lower against the dollar at $1.096 in early European trade.

Brent crude was 0.4% higher at $53.58 per barrel. Gold lost 0.9% to $1,083.40 per troy ounce.

Write to Josie Cox at [e-mail]

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