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European markets follow Asian shares higher on bumper earnings

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A Nikkei share average and world stock indices board in Tokyo, Japan. Photo: James Matsumoto/SOPA Images/Sipa USA
A Nikkei share average and world stock indices board in Tokyo, Japan. Photo: James Matsumoto/SOPA Images/Sipa USA

European markets continued their upward trajectory for the week by the closing bell in London, following Asian markets higher as investors anticipated yet more earnings today.  

Half-year results from FTSE heavyweight Legal & General (LGEN.L) gave the index an early lift as the company said it had achieved operating profit of £1bn, up 14% from 2020 when it was £946m ($1.3bn). 

The investment manager said it would pay a dividend of 5.18p, up 5% from the same time last year.

Shares finished the day 3.1% higher. 

The FTSE 100 (^FTSE) rose 0.3% by the closing bell. Germany's DAX (^GDAXI) headed 0.9% higher and France's CAC (^FCHI) was up 0.4%. 

The market will be looking to US ADP jobs data later this week and the US ISM services numbers.

"Moving forward, the strength of corporate earnings is likely to remain the driving force supporting equity markets in the coming months," said Naeem Aslam, chief market analyst at Avatrade. 

"Investors should understand that the strong percentage growth in earnings is amplified by the rock bottom figures of last year amidst the pandemic. Having said that, the published results are still remarkable when even compared with pre-pandemic reports."

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In the US, stocks moved lower by 4.30pm London time. The S&P 500 (^GSPC) was down 0.4%. The Dow (^DJI) declined 0.8%, and the Nasdaq (^IXIC) was almost flat. 

Overnight in Asia, stocks were mixed. Hong Kong's Hang Seng (^HSI) rose 1.3%, the SSE Composite (000001.SS) was up 0.8% and the Nikkei (^N225) fell 0.2%. 

Hong Kong's rally came after Beijing tempered an attack on video games companies. Indexes are also being cheered by strong first-half results — outweighing the fears of the damage the spread of the Delta COVID variant could do to the economy.

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